Keurig Dr Pepper said Monday that it would acquire the European coffee company JDE Peet’s for roughly $18 billion in the latest mega deal by food companies trying to stay a step ahead of changes in consumer demand.
After completing the acquisition, Keurig Dr Pepper plans to combine its coffee business, which includes its namesake single-serve coffee pods, with JDE Peet’s and spin it into a new company. Keurig Dr Pepper would leave behind its mammoth beverage business, whose brands include not only Dr Pepper but Sunkist, Snapple, 7UP and others.
Keurig Dr Pepper said the deal, which would need to be approved by shareholders and regulators, was expected to be finalized in the first half of 2026.
The two-step transaction is aimed at effectively undoing the multibillion-dollar combination of Keurig and Dr Pepper announced in 2018. That deal was meant to create a beverage giant with the capacity to distribute hot and cold drinks to customers, while saving money.
But in the past several years, the coffee industry has slowed significantly, amid surging coffee bean prices and softening demand. As a result, the coffee business has become a drag for Keurig Dr Pepper.
A number of food companies have announced or considered deals in recent years.
In July, the Italian candy company Ferrero said that it would acquire the cereal giant WK Kellogg in a $3.1 billion deal. Kraft Heinz, a behemoth with $26 billion in annual revenue and a portfolio of condiment, lunch meats and frozen potato brands, has been weighing its own deal to break up a merger announced in 2015.
Keurig Dr Pepper’s chief executive warned during the company’s earnings call last month that it expected the company’s coffee business to remain “subdued” because of the effects of inflation, tariffs and consumer uncertainty. Sales at its U.S. coffee division declined slightly in the quarter ending June 30, to $948 million.
Droughts in Brazil and Vietnam, two of the biggest coffee exporters in the world, have resulted in smaller harvests and driven up prices. On top of that, this month President Trump imposed a 50 percent tariff on coffee imported from Brazil.
Keurig Dr Pepper’s soda business, in contrast, has done extremely well with the sale of flavors like cherry, cream soda and blackberry. In the latest quarter, sales in its beverage division surged 10.5 percent to $2.7 billion from a year earlier.
Based in the Netherlands, JDE Peet’s has cobbled together nearly 50 coffee and tea brands from all over the world, including L’Or from France, Jacobs coffee from Germany and Ti Ora tea from New Zealand. In the first half of this year, sales at JDE Peet’s rose 19.8 percent, to just under $6 billion, due largely to price increases.
The JDE Peet’s chief executive, Rafa Oliveira, told analysts in July the company was better positioned than many of its American competitors to weather the impact of tariffs, because less than 30 percent of coffee it uses comes from Brazil.
Lauren Hirsch is a Times reporter who covers deals and dealmakers in Wall Street and Washington.
Julie Creswell is a business reporter covering the food industry for The Times, writing about all aspects of food, including farming, food inflation, supply-chain disruptions and climate change.
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