The company announced a mega deal to buy the Netherlands’ JDE Peet’s and an internal reorganization.
Keurig Dr Pepper shares were falling sharply as premarket trading commenced on Monday, hours after the beverages company confirmed its plan to acquire Dutch coffee and tea giant JDE Peet’s for $18.4 billion.
Shares were down 3.2% as of 5:30 pm ET. The stock had gained 9.4% year-to-date, as of its last close. However, on Stocktwits, the retail sentiment for the shares held in the ‘bullish’ zone.
Keurig Dr Pepper announced early Monday that it would buy JDE Peet’s for 15.7 billion euros in cash and plan to separate its coffee business (comprising its existing coffee operations plus JDE Peet’s operations) from its other beverage operations.
The two resulting companies, “Global Coffee Co.” and “Beverage Co.” will be listed in the United States and led by Keurig CFO Sudhanshu Priyadarshi and CEO Tim Cofer, respectively.
A company statement pegged Global Coffee Co.’s annual net sales at $16 billion and those of Beverage Co. at $11 billion.
The 31.85 euro-a-share deal price is 20% higher than JDE Peet’s last close on Amsterdam’s Euronext on Friday.
The acquisition and reorganization come seven years after a merger between Keurig Green Mountain and Dr Pepper Snapple created Keurig Dr Pepper.
JDE Peet’s is majority-owned by Germany’s JAB, which also holds a significant minority stake in Keurig Dr Pepper, according to Reuters.
Retail investors were informed of the deal after reports emerged late Sunday, which lifted sentiment on Stocktwits.
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