Keurig Dr Pepper Acquires JAB Holding Company, Separates Coffee and Soft Drink Operations

Less than a decade after their merger, Keurig and Dr Pepper plan to become separate companies again. Keurig Dr Pepper said Monday it is buying the owner of Peet's Coffee for $18 billion (15.7 billion euro). Then it will break itself in two, with one company selling coffee and the other selling cold beverages like Snapple, Dr Pepper, 7UP and energy drinks.

Investors were concerned about the company's plan to finance the acquisition with a mix of cash and debt. S&P Global placed Keurig Dr Pepper on a credit watch with negative implications Monday, saying it was concerned about the increase in debt and the complexity of the two-step transaction.

Keurig Dr Pepper CEO Timothy Cofer said the separate coffee and beverage businesses would be more nimble and better able to focus on growth opportunities in their own markets.

"Following the separation, each stand-alone entity will lead its industry with a sharp strategic focus and with operating models that are finely calibrated to their unique categories and markets," Cofer said Monday during a conference call with investors.

The combination with Peet’s parent JDE Peet’s, which is based in Amsterdam, significantly expands Keurig's presence beyond North America, where it's known for its single-serve coffee machines. JDE Peet’s owns the brands L’OR, Jacobs, Douwe Egberts, Kenco, Pilao, OldTown, Super and Moccona.

Cofer said the combined coffee business will generate $16 billion in annual net sales. The combined buying power will help Keurig and Peet's compete with other large coffee players like Nestle and Starbucks, especially as rising demand and poor weather conditions push coffee prices near record highs.

"We like, and I like, the coffee category. Why? It’s huge. It’s ubiquitous," Cofer said. "Obviously, we’ve up to this point focused on North America. But the global data shows coffee is consistently growing on a volume basis above population."

The merger could also help the company cushion the impact of U.S. tariffs. President Donald Trump imposed a 50% tariff this summer on most imports from Brazil — the world’s leading coffee producer — for an investigation of its former president, Jair Bolsonaro, a Trump ally.

Meanwhile, sales of Dr Pepper's traditional soft drinks have been slowing as health-conscious consumers look for new alternatives. The newly formed beverage company, with $11 billion in annual sales in the U.S. and Mexico, can continue to pivot to its faster-growing beverages, like the energy drinks Ghost and C4 and the hydration drink Electrolit.

The companies said they expect to save around $400 million over three years because of the merger, which is expected to close in the first half of 2026.

Once the two companies are separated, Cofer will become CEO of the cold beverage business, which will be based in Frisco, Texas. Keurig Dr Pepper's chief financial officer, Sudhanshu Priyadarshi, will lead the coffee business, which will be located in Burlington, Mass. Its international headquarters will be in Amsterdam.

The deal is the latest big maneuver in the food and beverage industry, which has been trying to keep up with changing consumer tastes.