Acquiring JDE Peet’s: KDP’s Plan to Split Coffee & Beverages

Keurig Dr Pepper (KDP) is moving ahead with updated financing plans and a refined timeline for its acquisition of JDE Peet's, setting the stage for one of the most significant transformations in the global beverage sector. 

The deal, targeted to close in early April 2026, will ultimately lead to the creation of two independent, publicly traded companies: Beverage Co. and Global Coffee Co. 

With a carefully structured mix of debt and equity, the transaction is designed to strengthen capital structures while unlocking long-term growth across coffee and refreshment beverages.

Financing the future

To fund the US$18.3bn acquisition, KDP plans to deploy approximately US$9bn in long-term debt, US$8.5bn in equity capital and assume roughly US$5bn of existing JDE Peet’s bonds, resulting in projected combined net leverage of 4.5 times. 

Under the terms of the transaction, JDE Peet’s shareholders will receive US$37 per share in cash, a 33% premium to the company’s 90-day volume-weighted average stock price, while still receiving a previously declared US$0.42 per share dividend prior to closing, with no reduction to the offer price.

A major development includes upsizing the previously announced convertible preferred equity investment in Beverage Co. to US$4.5bn from US$3bn. 

"Today's update demonstrates our commitment to ensuring strong and resilient capital structures at each stage of this transaction by introducing an additional US$1.5bn of cost-efficient equity capital into the financing and bringing on board a high-quality mix of shareholders who recognise the value creation opportunity ahead,” says Anthony DiSilvestro, Chief Financial Officer, Keurig Dr Pepper in the company’s statement.

“Our comprehensive financing solution, combined with strong cash generation, will drive rapid deleveraging, reinforce KDP's balance sheet and help to establish Beverage Co. and Global Coffee Co. as successful, investment-grade companies." 

The investment is co-led by funds managed by affiliates of Apollo Global Management and KKR, with additional participation from accounts advised by T. Rowe Price Investment Management and other long-term investors. 

The preferred instrument carries an initial conversion price of US$37.25 per share and a 4.75% dividend rate and aims to remain with Beverage Co. after separation. 

As a result of the increased equity commitment, the company says it will no longer pursue a partial IPO of Beverage Co.

Building a global coffee champion

The combination brings together KDP’s Keurig single-serve platform, North America’s leading single-serve coffee system, with JDE Peet’s nearly 300-year legacy and expansive international brand portfolio. 

The acquisition is expected to deliver approximately US$400m in cost synergies over three years, with EPS accretion beginning in year one.

Upon separation, Global Coffee Co. is projected to generate roughly US$16bn in annual net sales, making it the world’s largest pure-play coffee company. 

“Today’s announcement marks a transformational moment in the beverage industry, as we build on KDP’s disruptive legacy by creating two winning companies, including a new global coffee champion,” says Tim Cofer, CEO of KDP. 

“Through the complementary combination of Keurig and JDE Peet’s, we are seizing an exceptional opportunity to create a global coffee giant. 

“This is the right time for this transaction, with KDP in a position of operational and financial strength, momentum across our evolved portfolio and increasing coffee category resilience. 

“By creating two sharply focused beverage companies with attractive and tailored growth propositions and capital allocation strategies, we are poised to generate significant shareholder value in both the near and long term.”

With operations spanning more than 100 countries, including 40 where it holds the top or second market position by sales, the company aims to operate across all coffee segments, channels and price points. 

Its portfolio is set to include billion-dollar brands such as Keurig, Jacobs, L’OR and Peet’s, supported by more than 40 manufacturing facilities worldwide and a sophisticated route-to-market network. 

Coffee represents a US$400bn global category and the new entity is positioned to drive the next wave of innovation while delivering strong margins, robust cash flow and a compelling dividend profile.

Scaling beverages in North America

Beverage Co., with more than US$11bn in annual net sales, is set to focus on the US$300bn North American refreshment beverage market. 

Its portfolio includes the United States’ leading flavored carbonated soft drink lineup anchored by the US$5bn-plus Dr Pepper brand and the US$1bn-plus Canada Dry brand, alongside 7UP and A&W, as well as more than US$3bn in high-growth categories such as energy and functional beverages. 

The company also maintains leading positions in Mexico and Canada, including Peñafiel mineral water in Mexico and a growing presence in ready-to-drink alcohol and low- and no-alcohol alternatives in Canada.

“We are excited to join forces with Keurig to chart the future of global coffee by leveraging our combined portfolio of the world’s most beloved coffee brands,” says Rafa Oliveira, CEO, JDE Peet’s.

“This highly complementary transaction will deliver an attractive premium for our shareholders and will create compelling future growth opportunities for our employees, customers and other stakeholders. 

“We are incredibly proud of the formidable global platform that we have built at JDE Peet’s and, together with Keurig, we are looking forward to powering a new era of coffee innovation and leadership, building on JDE Peet’s recently announced ‘Reignite the Amazing’ strategy.”

Supported by a differentiated Direct-Store-Delivery system in the United States and Mexico and a capital-efficient build-buy-partner model, Beverage Co. can operate as a growth-oriented challenger with strong free cash flow and dynamic capital allocation flexibility.

What comes next?

Separation timing is set to depend on achieving appropriate leverage levels and favorable market conditions, though operational readiness is targeted by year-end 2026. 

Until separation, the companies are due to be led by KDP CEO Tim Cofer and CFO Sudhanshu Priyadarshi. 

After the spin-off, Cofer is set to become CEO of Beverage Co., while the search continues for someone to lead Global Coffee Co., Rafa Oliveira is said to be remaining as CEO of JDE Peet’s through closing.

Global Coffee Co. is said to be headquartered in Burlington, Massachusetts, with its international headquarters in Amsterdam, while Beverage Co. is set to be based in Frisco, Texas, marking the start of two strategically focused beverage leaders designed to compete and grow on distinct global stages.