(Reuters) -Keurig Dr Pepper will buy Dutch coffee company JDE Peet’s for 15.7 billion euros ($18.4 billion) in cash, a 20% premium to its stock market valuation at the end of last week, the U.S. company said on Monday.
Shares of JDE Peet’s jumped 18% in early trade, on track for their best day on record.
The merged company, aiming to expand its coffee offering to more than 100 countries, plans to separate its beverage and coffee units “as soon as practicable”, Keurig said.
The two resulting companies, “Beverage Co.” and “Global Coffee Co.”, will be listed in the United States, and led by Keurig CEO Tim Cofer and CFO Sudhanshu Priyadarshi, respectively.
Keurig said that Global Coffee Co., with around $16 billion in combined annual net sales, will be well positioned to profit from the world’s $400 billion coffee market, while Beverage Co., with more than $11 billion in yearly net sales, will focus on North America’s $300 billion refreshment beverage market.
Keurig Dr Pepper, created in 2018 through the merger of Keurig Green Mountain and Dr Pepper Snapple, owns brands including Dr Pepper, Snapple, 7UP, and Green Mountain Coffee.
The company has a market valuation of about $48 billion, while Amsterdam-listed JDE Peet’s, with brands including Jacobs, L’Or, Tassimo and Douwe Egberts, was valued at 12.76 billion euros at Friday’s market close, according to LSEG data.
Keurig’s shares have risen nearly 10% this year on strong beverage sales. Both it and JDE Peet’s have flagged the impact of high coffee bean prices, which are seen rising again after U.S. President Donald Trump slapped a 50% levy on beans imported from Brazil from August 6.
Prices of Arabica and Robusta beans touched record highs this year as unpredictable weather patterns pressured supply, and have been volatile recently.
JDE Peet’s is majority-owned by Germany’s JAB, which also holds a significant minority stake in Keurig Dr Pepper, according to LSEG data.
($1 = 0.8544 euros)
(Reporting by Angela Christy in Bengaluru and Mateusz Rabiega in Gdansk; Editing by Stephen Coates, Kirsten Donovan)
