Keurig Dr Pepper and JDE Peet's announced they have entered into a definitive agreement under which KDP will acquire JDE Peet's in an all-cash transaction. The company says the deal will create a "global coffee champion" through the complementary combination of KDP's Keurig with JDE Peet's portfolio of coffee brands. After the acquisition closes, KDP plans to separate into two independent, U.S.-listed publicly traded companies to create, "a scaled growth challenger in North America's attractive refreshment beverages market (Beverage Co.) and the world's #1 pure-play coffee company (Global Coffee Co.)."
Under the terms of the transaction, KDP will pay JDE Peet's shareholders €31.85 per share in cash, a 33% premium to JDE Peet's 90-day volume-weighted average stock price, representing a total equity consideration of €15.7 billion. JDE Peet's will also pay a previously declared dividend of €0.36 per share prior to closing, with no reduction to the offer price.
The company says that the planned separation, via a tax-free spin-off of Global Coffee Co., "will position Beverage Co. and Global Coffee Co. to win in their respective markets by leveraging operating models optimized to unique category dynamics."
Upon separation, Global Coffee Co., with approximately $16 billion in combined annual net sales, will reportedly be the world's largest pure-play coffee company. Beverage Co., with more than $11 billion in annual net sales, will be a scaled challenger in the $300 billion North American refreshment beverage market.
"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, 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."
"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."
Upon completion of the acquisition of JDE Peet's and until the intended separation is complete, the combined company will be led by KDP's management team, including CEO Tim Cofer and CFO Sudhanshu Priyadarshi.
Upon completion of the separation, Cofer will become CEO of Beverage Co. and Priyadarshi will become CEO of Global Coffee Co. Rafa Oliveira will continue to serve as CEO of JDE Peet's until the closing of the acquisition. Additional members of leadership and Boards of Directors for both companies will be announced at a later date.
The global headquarters for Global Coffee Co. will be located in Burlington, Mass., and its international headquarters will be in Amsterdam, the Netherlands. Beverage Co. will be headquartered in Frisco, Texas.
