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Keurig Dr Pepper is nearing a roughly $18bn acquisition of European coffee company JDE Peet’s, in a deal that could set the stage for the break-up of the US drinks giant, according to people familiar with the matter.
The deal could lead to a separation of the combined group’s coffee and soft drinks units, dismantling a 2018 merger that brought Keurig and Dr Pepper together, two people said.
A pact is likely to be announced as early as Monday, provided the talks do not hit any last-minute snags, they added.
Amsterdam-listed JDE Peet’s, which owns more than 50 brands including café chain Peet’s Coffee and retail coffee brands Douwe Egberts and Kenco, had a market value of $15bn, as of Friday’s close.
Keurig Dr Pepper had a market value of $47bn. European investment group JAB Holdings is a controlling shareholder in JDE Peet’s and still retains a large minority stake in Keurig Dr Pepper after selling down its shareholding following the 2018 merger.
Keurig Dr Pepper’s soft drinks brands, including Dr Pepper, Canada Dry and Snapple, have performed well since the 2018 merger, but its coffee division has underwhelmed because of stiff competition.
JAB believes that by separating the two companies, it will be able to unleash more value from the soft drinks group, said a person briefed about the matter.
Keurig said in July that the performance of its coffee unit would remain “subdued” into fiscal 2025, underscoring the challenges facing its at-home brewing platform even as the wider non-alcoholic beverages market continues to expand at pace.
Part of the problem for the coffee unit has been rising costs linked to tariffs imposed by US President Donald Trump on several countries from which it imports goods.
Keurig Dr Pepper has more recently focused its acquisition strategy on partnerships with fast-growing drinks brands, such as its nearly $1bn deal last year to take a 60 per cent stake in energy drink Ghost.
The Wall Street Journal first reported on the potential tie-up. Keurig Dr Pepper and JDE Peet’s did not immediately respond to requests for comment.
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