The U.S. beverage group moves to buy the owner of Douwe Egberts and Kenco in an all‑cash tender, with plans to separate coffee and soft drinks into two public companies.

Keurig Dr Pepper is poised to reshape the global beverage landscape with an $18 billion acquisition of European coffee group JDE Peet’s, owner of the Douwe Egberts and Kenco brands. The transaction, announced on Monday, would ultimately split the American company into two separate, U.S.-listed businesses — one focused on coffee, the other on refreshment beverages. It comes seven years after Keurig Green Mountain’s merger with Dr Pepper Snapple created a coffee‑and‑cola hybrid that puzzled some investors and rivals alike. The new plan signals management’s conviction that each side of the portfolio will command a stronger valuation and clearer strategy on its own.

Under the terms disclosed by the companies, Keurig Dr Pepper (KDP) will launch an all‑cash offer of €31.85 per share for Amsterdam‑listed JDE Peet’s, valuing the target at about €15.7 billion — roughly $18.4 billion at current exchange rates. The offer represents a substantial premium to JDE Peet’s recent trading averages. KDP said it has arranged a fully committed, “certain funds” bridge facility to finance the tender and related fees, with plans to replace the bridge over time with longer‑dated debt and cash generation. JDE Peet’s shareholders are also set to receive a previously declared €0.36 dividend prior to closing, without a reduction in the offer price.

JDE Peet’s brings a broad stable of coffee assets, from out‑of‑home and retail stalwart Douwe Egberts to U.K. favorite Kenco, as well as specialty roaster Peet’s Coffee and brands including Jacobs, L’OR and Tassimo. Its footprint spans more than 100 markets across retail, away‑from‑home and e‑commerce. Combining those assets with KDP’s North American Keurig pod ecosystem would create one of the most expansive coffee platforms in the world. Meanwhile, the Dr Pepper, Snapple and 7UP franchises would anchor a separate refreshment‑beverages company focused squarely on carbonated soft drinks, teas and energy.

The strategic logic is straightforward. Investors have long struggled to benchmark KDP against pure‑play peers because its growth, margins and working‑capital needs are driven by two very different engines. Coffee rides commodity cycles, equipment penetration and channel mix; carbonated soft drinks are built on brand equity, route‑to‑market muscle and heavy marketing spend. By carving out distinct equity stories, management aims to unlock a classic sum‑of‑the‑parts valuation — one entity marketed as a global coffee champion and the other as a focused refreshment‑beverages player.

The demerger plan also reflects shifting priorities at JAB Holding, the investment group that controls JDE Peet’s and remains a significant KDP shareholder. JAB has been rebalancing its portfolio and returning capital in recent years. A cash sale of JDE Peet’s to a familiar partner reduces execution risk while preserving upside via its continuing stake in KDP. For KDP, the deal extends a pivot toward faster‑growing beverage niches; in recent years it has taken minority positions in up‑and‑coming energy and hydration brands to complement its core sodas and teas.

Market reaction in Europe was swift. JDE Peet’s shares leapt in early Amsterdam trading on the news, on track for their best day on record, as arbitrageurs and long‑term holders priced in the premium and the likelihood of completion. Analysts said the headline price looks demanding against recent earnings, but the premium reflects both the scarcity value of scaled coffee assets and the potential for procurement, manufacturing and distribution synergies — particularly in capsules and roast‑and‑ground. The tender structure also offers certainty in a sector where cross‑border mergers can be protracted.

Financing is set to be straightforward, at least initially. KDP has lined up a committed bridge facility of roughly €16.2 billion from a bank group to backstop the cash consideration and fees. From there, management is expected to refinance with a mix of term loans, bonds and internal cash flow, with an eye to preserving investment‑grade metrics across the businesses both before and after the split. The company reiterated its full‑year outlook and dividend policy alongside the deal announcement, signaling confidence in the balance sheet and near‑term cash generation.

Regulatory risk appears manageable. KDP’s soft‑drink operations are concentrated in North America with bottling and distribution partnerships that do not overlap materially with JDE Peet’s primarily European retail coffee footprint. Where the two companies do intersect — in coffee pods and branded packaged coffee in the U.S. — the presence of large competitors such as Nestlé (Nespresso, Nescafé), Starbucks (with partners) and robust private‑label offerings should help alleviate antitrust concerns. In Europe, the transaction would largely consolidate ownership rather than eliminate a head‑to‑head rival in carbonated drinks.

The announcement caps a period of mixed fortunes for coffee companies. Green coffee prices have been volatile amid climate‑related supply shocks in Brazil and Vietnam, while freight and packaging costs have only partly rolled off. At the same time, consumer demand has held up in premium segments — particularly single‑serve and specialty — even as value formats gain share in supermarkets. JDE Peet’s has been pruning lower‑margin SKUs, renovating brands and pushing into ready‑to‑drink, while KDP’s Keurig ecosystem continues to benefit from at‑home consumption and a steady pipeline of licensed and owned brands.

For the soda side, a standalone KDP would enter public markets with more than $11 billion in annual revenue and a strong free‑cash‑flow profile, fueled by brands with enviable loyalty in their core geographies. Independence could free up capital allocation for selective M&A and additional stakes in high‑growth beverages, while simplifying investor messaging. The company’s distribution partnerships — including with bottlers that also carry rival brands — would remain a differentiator in shelf execution and promotional efficiency.

Risks remain. Executing a major cross‑border acquisition and a subsequent separation is a complex two‑step that will test management bandwidth. Integration of procurement and manufacturing in coffee, especially across capsules and filter formats, can take time to deliver savings without disrupting service levels. On the balance sheet, a higher debt load ahead of the separation raises sensitivity to interest rates and commodity swings. And while the valuation premium appears justified by strategic logic, it increases the pressure to hit synergy and growth milestones.

Still, the prize is meaningful. The standalone coffee company would combine one of the world’s largest out‑of‑home and retail coffee franchises with a dominant at‑home pod ecosystem in North America, creating a platform for innovation in formats and for international expansion. The beverages company, meanwhile, would be positioned to defend and extend share in flavored sodas, teas and energy, with the option to dial up marketing and innovation without competing internally for capital with coffee equipment or green‑bean procurement.

The transaction is subject to customary conditions, including regulatory approvals and a minimum‑acceptance threshold for the tender. KDP expects to commence the offer in the coming weeks, with closing targeted for 2026, after which the separation of coffee and soft drinks could proceed, pending board and shareholder approvals. For investors who have long debated whether KDP is a beverage company with a coffee problem or a coffee company with a soda habit, Monday’s announcement offers a clearer answer: soon, it intends to be both — just not under the same roof.

Deal at a glance

Buyer: Keurig Dr Pepper (United States)

Target: JDE Peet’s (Netherlands), owner of Douwe Egberts, Kenco, Jacobs, L’OR, Tassimo and Peet’s Coffee

Headline value: ~€15.7bn (~$18.4bn) all‑cash tender at €31.85 per share

Financing: Committed “certain funds” bridge facility (~€16.2bn); subsequent long‑term refinancing planned

Structure: Acquire JDE Peet’s, integrate select functions, then separate into two U.S.-listed companies — coffee and refreshment beverages

Status: Announced August 25, 2025; closing subject to regulatory clearances and tender conditions