Keurig Dr Pepper to buy a Dutch coffee company JDE Peet’s in a $ 18 billion deal

Keurig Dr Pepper will acquire a Dutch coffee and tea company JDE Peet’s with approximately $ 18 billion a deal that can boost the American giant’s coffee business, the two companies said on Monday.

The deal has been reported for the first time by The Wall Street JournalS

Keurig Dr Pepper will pay the shareholders of the JDE Peet 31.85 euros ($ 37.3) per cash share, which represents a 33% premium for the price of the Dutch company of the Dutch company, which is a total purchase of equity of 15.7 billion euros ($ 18.4 billion). In the meantime, it will pay the declared dividend of EUR 0.36 per share before the transaction is completed.

The absorption is expected to generate synergies of $ 400 million in three years.

JDE Peet’s has grown 17.18% at 08:30 am London time (03:30 ET).

Keurig Dr Pepper, which owns brands such as DR Pepper, 7UP, Snapple and Green Mountain Coffee, saw a shrinking sales in its American coffee department, reduced by 0.2% to $ 900 million in the second quarter.

Keurig Dr Pepper strives to raise their attractiveness with frugal buyers who prefer to drink their coffee at home while embarking on cold coffee suggestions in an attempt to attract Starbucks and Dunkin clientele.

Following the acquisition of JDE Peet, Keurig Dr Pepper intends to divide its drinks and coffee, such as two separate companies listed by the United States at the earliest opportunity. Such a step would effectively relax The merger of 2018 Between Keurig and DR Pepper Snapple, which at the time created the third largest drink company in North America with approximately $ 11 billion in annual revenue.

After the division, the resulting coffee company is expected to reach $ 16 billion in combined annual net sales and will be led by the current Chief Finance Officer of Keurig Dr Peper Sudhanshu Priyadarshi.

Meanwhile, the Beveges company is expected to have $ 11 billion annual net sales and will be assisted in separation by the acting CEO of KEURIG DR Pepper Tim Coofer.

The CEO of JDE Peet, Rafael Oliveira, will remain in office to head the Dutch coffee company until the acquisition is closed.

– CNBC’s Victor Loh contributed to this report