• Keurig Dr Pepper agrees to buy JDE Peet's for €15.7 billion ($18 billion).
• The deal includes plans to split into two companies: Global Coffee Co. and Beverage Co.
• Global Coffee Co. will generate approximately $16 billion in annual sales.
• The acquisition addresses challenges including rising coffee prices and U.S. tariffs.
• JDE Peet's brands include Jacobs, L’Or, and the renowned Peet's Coffee.

Keurig Dr Pepper has announced an agreement to acquire the Dutch coffee company JDE Peet's for €15.7 billion (approximately $18 billion), marking one of the largest European acquisitions in recent years. This strategic move aims to establish a significant presence in the coffee market and address the challenges posed by increasing coffee prices and trade tariffs, especially following the U.S. government's 50% tariff on Brazilian coffee beans, which are crucial for the industry, according to Reuters and SFGate.

The acquisition will lead to a restructuring of Keurig Dr Pepper. Following the deal, the company will split into two separate publicly traded entities: Global Coffee Co., which will focus on coffee brands, and Beverage Co., which will manage soft drinks including Dr Pepper and Snapple. The new coffee enterprise is projected to generate around $16 billion in annual sales, significantly increasing its market competitiveness against industry leaders like Nestlé, according to Reuters and Los Angeles Times.

Given the competitive landscape, Keurig's CEO Tim Cofer stated that the merger and subsequent split provide an exceptional opportunity to create an industry-leading coffee entity. The merger also allows the combined coffee business to take advantage of expected savings of $400 million over three years, aiding in managing higher production costs caused by tariffs, as indicated by Reuters and NPR.

JDE Peet's stands out in the coffee market with renowned brands including L'Or, Jacobs, and Peet's Coffee, which has been pivotal in shaping gourmet coffee culture in the U.S. The company reported significant growth, contrasting with Keurig Dr Pepper, which has faced stagnation in its coffee segment, highlighting the need for this acquisition. The value of JDE Peet's shares soared by more than 15% following the announcement, signaling investor confidence, according to reports from BBC and SFGate.