Keurig Dr Pepper announced a $18.4 billion cash acquisition of Dutch coffee giant JDE Peet’s, offering a 20% premium to its recent market valuation.

The deal sent JDE Peet’s shares soaring 18% in early trading, marking their strongest single-day performance on record.

The transaction will create two separate publicly listed entities: “Global Coffee Co.” with approximately $16 billion in annual net sales, focusing on the global $400 billion coffee market, and “Beverage Co.” with over $11 billion in sales, targeting North America’s $300 billion refreshment beverage sector.

Keurig CEO Tim Cofer will lead Beverage Co., while CFO Sudhanshu Priyadarshi will helm Global Coffee Co.

Both companies have faced recent margin pressures from volatile coffee bean prices, exacerbated by Trump’s 50% tariff on Brazilian imports and climate-related supply constraints that drove Arabica and Robusta beans to record highs this year.

The combined entity aims to leverage scale to mitigate cost pressures and capitalize on complementary geographic and product portfolios.

JDE Peet’s majority owner, German investment firm JAB, holds a significant minority stake in Keurig Dr Pepper, simplifying the acquisition process.

The deal reflects ongoing consolidation in the global coffee industry as companies seek operational synergies and market diversification amid evolving consumer preferences and supply chain challenges.

Keurig’s shares have gained nearly 10% this year on strong beverage performance, though investors will monitor integration risks and regulatory approvals. The acquisition positions the combined coffee business as a dominant player against rivals like Nestlé and Starbucks in the rapidly evolving global coffee landscape.

Source: Reuters.