Over $130 Billion, the Largest Consumer Merger of the Year is Set to Be Born

Following Starbucks China and Costa, another globally renowned coffee brand is up for sale.

 

Recently, multiple media outlets reported that North American beverage company Keurig Dr Pepper (KDP) has reached a final agreement to acquire JDE Peet's, the parent company of Peet’s Coffee, in an all-cash transaction. The total equity consideration is €15.7 billion.

 

 

Post-acquisition, KDP plans to split into two independent U.S.-listed companies, focusing on soft drinks and coffee businesses, respectively.

 

The deal still requires anti-trust reviews from seven jurisdictions, including the U.S., EU, Brazil, and China. Management expects all approvals to be secured by Q1 2026.

 

The €15.7 billion transaction price far exceeds the $10 billion valuation cap for Starbucks China’s business. If finalized, it will rank among the largest mergers and acquisitions in the global consumer goods sector in 2025.

After the $131.3 Billion Deal, KDP to Spin Off Coffee Business for IPO

According to The Wall Street Journal and Bloomberg, citing “informed sources,” Keurig Dr Pepper will acquire all outstanding shares of JDE Peet’s at €31.85 per share in cash, a 33% premium over its closing price on August 22.

 

JDE Peet’s current market capitalization is about $15 billion. The $18 billion offer translates to a price-to-sales ratio (TTM) of approximately 3.4x and an EV/EBITDA (2025E) of about 14x, both above the three-year average for major coffee sector deals globally (2.6x and 11x).

 

 

KDP’s Q2 2025 financials show cash and cash equivalents of $2.5 billion and an unused revolving credit line of $3.2 billion, insufficient to cover the full consideration. Informed sources reveal KDP has secured a $13 billion bridge loan commitment led by JPMorgan Chase and Bank of America, with plans to repay it post-transaction through bond issuance, asset sales, and equity refinancing.

 

Reports indicate that within 12 months of closing, KDP will initiate an IPO for its spun-off coffee business, tentatively named “NewCo Coffee,” with current KDP CFO Sudhanshu Priyadarshi appointed as CEO. The IPO is expected to raise $3-4 billion.

 

Per KDP’s plan, the post-spin-off “NewCo Coffee” will include the Keurig single-cup system, Green Mountain, Peet’s retail stores, and JDE Peet’s European and Latin American channels, with projected annual revenue of approximately $16 billion. The remaining soft drink and functional beverage business is expected to generate $11 billion in revenue in 2025.

Starbucks’ Three Founders Were Once Peet’s Apprentices

KDP currently owns globally recognized brands like Sprite, 7UP, and Canada Dry, with a market capitalization nearing $50 billion.

 

Notably, Peet’s Coffee under JDE Peet’s, the seller in this deal, is recognized as the pioneer of the “second wave” specialty coffee movement. Even Starbucks’ three founders were once apprentices at Peet’s, sourcing green beans from them.

 

Data shows that in the first half of 2025 (H1), KDP’s total revenue was $7.93 billion, with the beverage segment contributing $5.02 billion (up 11% year-over-year) and the coffee segment $2.91 billion (down 2% year-over-year). The coffee segment’s EBITDA margin was 21.5%, down 3.1 percentage points from last year.

 

 

KDP’s Keurig system remains the leader in the U.S. single-cup coffee market with a 44% share. However, in Q2 2025, K-Cup shipments dropped 6% year-over-year, primarily due to an 8% price hike revealing demand elasticity.

 

Since July 2025, the U.S. has imposed a 50% tariff on Brazilian Arabica beans, with KDP forecasting an additional $70 million in raw bean cost increases in the second half of the year.

 

Moreover, among younger consumers, Keurig’s “pod + machine” model is being replaced by ready-to-drink cold brew and premium drip bags. Management acknowledges the need for a “new brand narrative and global store assets.”

 

Post-acquisition of JDE Peet’s, KDP will gain over 370 Peet’s directly operated stores (240 in North America, 80 in China, and others in Japan, South Korea, and the Middle East) and over 50 international brands like L’OR, Jacobs, and Senseo, expanding its footprint from North America to Europe, Latin America, and Asia-Pacific.