Keurig Dr Pepper, a major US beverage company, has announced its decision to acquire Dutch coffee company JDE Peet’s for €15.7 billion (£13.6 billion, $18.4 billion). This acquisition marks the largest in Europe in over two years. Post-merger, the companies plan to separate into two publicly traded entities: one will concentrate on coffee brands, including Douwe Egberts and L’Or, while the other will manage soft drink brands like Schweppes, Snapple, and 7 Up.
Company leaders have expressed that this acquisition aims to build a “resilient and diversified” coffee business, potentially forming a leading global player in the coffee sector. Keurig Dr Pepper CEO Tim Cofer indicated that the timing was appropriate for this strategic move. However, following the announcement, Keurig Dr Pepper’s stock fell by more than 7%, raising questions about the consistency of the company’s strategy, particularly its original focus on the merger of its soda operations with Green Mountain Coffee.
Executives had previously identified benefits from their combined distribution network, though they have faced challenges in achieving expected growth. Recently, they noted that growth in the coffee market might remain “subdued” this year, partly due to tariffs affecting the US, which is a crucial market for the business.
The new soft drink division will be based in Texas under Cofer’s leadership, while the merged coffee entity will operate from Massachusetts, boasting a portfolio that generates $16 billion in annual sales and operates out of over 40 manufacturing facilities globally.
JDE Peet’s, formed from a merger of Jacobs Douwe Egberts and Peet’s in 2019 and made public the following year, has encountered difficulties in meeting expectations due to rising raw coffee prices caused by droughts in major producing countries. Earlier this year, the company faced disagreements with European retailers over price increases, but they have since resolved most issues. The acquisition values JDE Peet’s shares at €31.85 each, approximately 20% higher than prior to news of the deal but still below their peak from 2020. JAB Holding Co, which owns nearly 70% of JDE Peet’s voting power, also holds around 4% of Keurig Dr Pepper.
Source: https://www.bbc.com/news/articles/cr4e7vp19p1o?at_medium=RSS&at_campaign=rss