Keurig Dr Pepper (KDP) has announced its forthcoming acquisition of JDE Peet’s, the renowned European coffee titan, in a significant deal worth A$25.9 billion (€15.7 billion). This bold strategic move will result in the division of the company into two separately traded entities.
In the Australian market, JDE Peet’s owns top local coffee brands like Campos Coffee and Piazza D’Oro, in addition to its international brands such as Moccona, L’Or, Jacobs, and Pickwick.
As per the agreement, KDP will buy all the remaining shares of JDE Peet’s, which is listed in Amsterdam, for A$52.55 (€31.85) per share in cash. This represents a 33% premium over the 90-day volume-weighted average price of the company’s shares.
This agreement will lead to the formation of two independent market leaders: one concentrating on the global coffee sector, while the other will focus on North American beverages.
The first resultant entity, named Global Coffee Company, will combine KDP’s Keurig single-serve platform with the vast coffee portfolio of JDE Peet’s. The newly formed company will have its headquarters in Burlington, Massachusetts, with international headquarters situated in Amsterdam. The current CFO of KDP, Sudhanshu Priyadarshi, will take the reins of this new entity.
The second entity, named Beverage Company, will concentrate on KDP’s famous beverage brands, which include Dr Pepper, 7Up, Canada Dry, and Snapple. The company will be based in Frisco, Texas, and will continue to be governed by the current CEO, Tim Cofer.
KDP anticipates that the acquisition will result in cost savings of approximately A$660 million (€400 million) over three years, and is expected to boost earnings starting from the first year post-acquisition.
KDP’s CEO, Tim Cofer, expressed his enthusiasm for the merger by noting, “The exceptional combination of Keurig and JDE Peet’s presents a significant opportunity to establish a global coffee giant. The timing of this transaction couldn’t be better, given KDP’s robust operational and financial position, the momentum across our diverse portfolio, and the increasing resilience of the coffee category.”
The transaction is anticipated to close within the first half of the next year. The subsequent splitting into two distinct companies is planned to occur shortly afterward, subject to final legal and board approvals.
Who will head the newly formed Global Coffee Company?
The Global Coffee Company will be led by Sudhanshu Priyadarshi, the current Chief Financial Officer of KDP.
What will the two new entities be focused on?
The Global Coffee Company will focus on the international coffee sector, while the Beverage Company will concentrate on North American beverages.
What are some of the brands owned by JDE Peet’s in Australia?
JDE Peet’s owns several well-known Australian brands, including Campos Coffee and Piazza D’Oro.
