Keurig Dr Pepper (KDP) stock has fallen 18 per cent following the announcement of its titanic US$18 billion deal to acquire international coffee conglomerate JDE Peet’s.
The stock fell 11 per cent the day after the deal was announced. In comparison, the S&P 500 fell just 0.4 per cent in the same day.
The overall 18 per cent wipe means about US$8 billion in value has been removed from the business. At the time of writing, it has experienced a small upwards swing of 2.66 per cent on the New York Stock Exchange, pricing it at US$29.72 per share.
Bloomberg’s Chris Hughes attributed the sharp drop in share value to the acquisition not looking like a bargain, with JDE Peet’s reporting roughly US$11 billion in sales.
The companies have said they expect to save about US$400 million as a result of the merger.
JDE’s share price has also taken a tumble since embarking on an initial public offering in 2020, with prices more than halving between Q2 2020 and Q1 2025, however, news of the acquisition has seen its own share prices surge.
The Europe-based brand has been engaging in a share buyback program, and at the time of its acquisition had repurchased 5,247,069 shares for a total consideration of €107.4 million.
The acquisition is expected to close in the first half of 2026, with the separation of the current KDP business into two entities – one based in the United States and the other in Europe – “as soon as practicable” after.
KDP CEO Tim Cofer will become CEO of the US-focused cold beverage business following the split, while CFO Sudhansu Priyadarshi will lead the coffee business.
Cofer believes the combined coffee business will generate US$16 billion in annual revenue, while the beverage company already generated US$11 billion in sales in the US and Mexico.
