NEW YORK — 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 in an $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.
The agreement unwinds the 2018 merger of Keurig and Dr. Pepper. Shares of Keurig Dr Pepper fell 7% in early trading Monday.
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 the companies compete with other large coffee players like Nestle and Starbucks and take advantage of growing global coffee sales.
“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.
