What investors need to know about Keurig Dr Pepper's deal with JDE Peet's
Aug. 25, 2025 12:31 PM ET
By: Clark Schultz, SA News Editor
Keurig Dr Pepper (NASDAQ: KDP) announced a major deal on Monday with the acquisition of JDE Peet's ( OTCPK:JDEPF) ( OTCPK:JDEPY). The deal will bolster Keurig Dr Pepper's (NASDAQ: KDP) struggling coffee business and create a global coffee leader operating in over 100 countries with a vast portfolio spanning all major coffee segments. Following the close in the first half of 2026, Keurig Dr Pepper (NASDAQ: KDP) will split into two independent, publicly listed companies, with one focusing on coffee and the other on soft drinks and other beverages.
The new coffee company will be the second biggest global coffee company after Nestle ( OTCPK:NSRGY), with $16 billion of pro forma long-term sales and $3.1 billion of EBITDA. Morgan Stanley analyst thinks the new coffee company will look to move past weakness in recent years to regain momentum. Notably, the portfolio will have four $1 billion brands, including Keurig, Jacobs, Peet's and L’OR, and six +$500 million brands, competing across all coffee formats and ranges of price points. Notably, the coffee company will be geographically balanced, with 40% of sales in North America, 40% in Europe, and 20% in the rest of the world.
Meanwhile, the new beverage company is seen continuing to be a growth-focused, smaller challenger in the U.S. refreshment beverages business. The business will consist of KDP's (NASDAQ: KDP) current U.S. Refreshment Beverages and International segments (excluding the Canadian coffee business). Keurig's ( KDP) stable of beverages brands includes Dr Pepper, 7UP, Canada Dry, A&W Root Beer and Cream Soda, Crush, Sunkist, Squirt, Schweppes, RC Cola, Snapple, Bai, Mott's, and a controlling stake in Ghost.
Jefferies analyst Kaumil Gajrawala said a globally diversified operation makes sense. The firm thinks the beverage business standalone likely trades at a higher multiple. "We don't anticipate anti-trust issues or a second buyer," advised Gajrawala.
Kepler Cheuvreux analyst Jon Cox said rolling the two coffee businesses together makes sense because it reduces the European-centric and commoditized nature of most of JDE Peet’s business, and gives Keurig international exposure.
Shares of JDE Peet's ( OTCPK:JDEPF) ( OTCPK:JDEPY) jumped more than 17% in Europe trading. Keurig Dr Pepper ( KDP) fell 8.2% in U.S. action. On a broad scale, the KDP-JDE Peet's combination could have implications for a wide range of companies, including Coca-Cola ( KO), PepsiCo ( PEP), Monster Beverage ( MNST), Nestle ( OTCPK:NSRGY), TreeHouse Foods ( THS), and J.M. Smucker ( SJM). |
