Keurig Dr Pepper will acquire JDE Peet's, owner of Peet's Coffee, for $18 billion and then split into two independent companies: one focused on coffee and the other on cold beverages such as Snapple, Dr Pepper, 7UP and energy drinks. The move effectively unwinds the 2018 Keurig-Dr Pepper merger and creates a coffee business with about $16 billion in combined sales and a beverage business with about $11 billion. The combined entities expect roughly $400 million in savings over three years. Trade tensions and tariffs, including a 50% U.S. tariff on many Brazilian imports, could push coffee prices higher and pressure sector performance.
By creating two sharply focused beverage companies with attractive and tailored growth propositions and capital allocation strategies, we are poised to generate significant shareholder value in both the near and long term," Cofer write in prepared remarks.
CEO Tim Cofer called it a "transformational moment" for the sector.
Trump imposed a 50% tariff this summer on most imports from Brazil - the world's leading coffee producer - for its investigation of its former president, Jair Bolsonaro, a Trump ally.
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