Soda beverage company Keurig Dr Pepper (KDP) announced a $18 billion deal to acquire Dutch coffee giant JDE Peet’s (DE:JDE). The Wall Street Journal had first reported a potential deal between the two companies. Through this deal, Keurig Dr Pepper intends to boost its coffee business, which has been struggling due to intense competition and the impact of tariffs. Following the acquisition, Keurig Dr Pepper will separate the refreshment beverages and coffee businesses into two separate publicly listed companies. The separation will undo the 2018 merger that combined Keurig and Dr Pepper. KDP stock was down 3.4% in Monday’s pre-market trading in reaction to the news.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
It is worth noting that Europe-based investment firm JAB Holding has majority control of voting power at JDE Peet’s and also owns a small stake in Keurig Dr Pepper.
Keurig Dr Pepper Acquires JDE Peet’s
Keurig Dr Pepper, which owns brands like Schweppes, 7UP, and Canada Dry, has a market cap of nearly $48 billion, while JDE Peet’s has a market value of about 12.8 billion euros (or $15 billion). Keurig Dr Pepper will pay JDE Peet’s shareholders 31.85 euros ($37.3) per share in cash, representing a 33% premium on the latter’s 90-day volume-weighted average stock price, which implies a total equity value of 15.7 billion euros ($18.4 billion). Meanwhile, JDE Peet’s will pay the previously declared dividend of 0.36 euros per share prior to the completion of the acquisition.
KDP’s coffee business has been under pressure due to intense competition and inflation. In Q2 2025, Keurig Dr Pepper reported a 0.2% decline in its U.S. coffee sales, as increased prices to combat inflation were offset by a decline in pod and brewer shipments. The company cautioned that it expects its coffee business to be subdued for the balance of this year, partly due to inflation and tariffs.
In contrast, KDP reported a 10.5% rise in its U.S. refreshment beverages business for Q2 2025, supported by market share gains in carbonated soft drinks, energy, and sports hydration, and the acquisition of energy drinks maker Ghost.
KDP highlighted that following the planned separation, the coffee business will have $16 billion in combined annual net sales, while the beverage company will generate more than $11 billion in annual net sales.
Is KDP a Good Stock to Buy?
Wall Street is currently bullish on Keurig Dr Pepper stock due to the strength in its U.S. refreshment beverages business. With nine Buys and three Holds, Wall Street has a Strong Buy consensus rating on Keurig Dr Pepper stock. The average KDP stock price target of $39.18 indicates 11.5% upside potential from current levels. KDP stock has risen more than 9% year-to-date.
