Keurig Dr Pepper and JDE Peet's announced they have entered into a definitive agreement under which KDP will acquire JDE Peet's in an all-cash transaction. The deal will create a global coffee champion through the complementary combination of KDP's Keurig, North America's leading single-serve coffee platform, with JDE Peet's worldwide portfolio of beloved coffee brands. After the acquisition closes, KDP plans to separate into two independent, US-listed publicly traded companies, creating a scaled growth challenger in North America's refreshment beverages market ("Beverage Co.") and a pure-play coffee company ("Global Coffee Co.").

Under the terms of the transaction, KDP will pay JDE Peet's shareholders €31.85 per share in cash, a 33% premium to JDE Peet's 90-day volume-weighted average stock price, representing a total equity consideration of €15.7 billion. JDE Peet's will also pay a previously declared dividend of €0.36 per share prior to closing, with no reduction to the offer price.

Strategic Rationale:
- Transformational Next Step in KDP's Shareholder Value Creation Journey
- Singular opportunity to establish a global coffee leader by combining KDP's disruptive spirit, next-generation coffee innovations and single-serve leadership with JDE Peet's nearly 300-year legacy, global reach and top-tier portfolio of brands.
- Acquisition of JDE Peet's expected to deliver compelling synergies and generate significant value for KDP shareholders.
- Planned separation, via a tax-free spin-off of Global Coffee Co., will position Beverage Co. and Global Coffee Co. to win in their respective markets by leveraging operating models optimized to unique category dynamics.
- Creates two strategically focused, scaled beverage companies with differentiated shareholder value propositions, featuring distinct growth and capital allocation frameworks designed to deliver sustained and compelling long-term value.

The acquisition of JDE Peet's will significantly enhance KDP's coffee positioning, creating a strong, resilient and diversified global portfolio. It will also unlock incremental operating and financial benefits, including approximately $400 million in anticipated cost synergies to be realized over three years and EPS accretion expected to start in year one of the combination.

Upon separation, Global Coffee Co., with approximately $16 billion in combined annual net sales, will be the world's largest pure-play coffee company. With reach across more than 100 countries, including 40 in which the company holds the No.1 or No.2 market position by sales, Global Coffee Co. will enjoy an unparalleled portfolio across all coffee segments, channels and price points. Coffee is one of the most consumed beverages globally, representing a $400 billion category with rapid growth in emerging markets, and Global Coffee Co. will lead the next generation of coffee innovation worldwide. With the ability to rapidly scale winning ideas, strong profitability, and robust cash generation, Global Coffee Co. will be well positioned to deliver attractive, predictable growth, enhanced by steady cash returns.

Beverage Co., with more than $11 billion in annual net sales, will be a scaled challenger in the $300 billion North American refreshment beverage market. With a portfolio of iconic and emerging brands, a differentiated and expanding Direct-Store-Delivery (DSD) system, and a proven, capital-efficient growth model, Beverage Co. will benefit from multiple drivers to continue to win in its vast and fragmented industry. Strong free cash flow will support a dynamic approach to capital allocation and enhance optionality.

Creating Two Beverage Leaders
Both Global Coffee Co. and Beverage Co. will be positioned to deliver attractive returns to their unique investor bases through distinct financial profiles, with tailored growth and capital allocation frameworks, and optimized operating models calibrated to core categories and geographies.

Global Coffee Co.: Pure-Play, Cash-Generative Global Coffee Powerhouse
Global Coffee Co. could have the world's most expansive coffee portfolio, including $1 billion-plus revenue brands Keurig, Jacobs, L'OR and Peet's.1 Global Coffee Co. will benefit from:

- Complementary geographic footprint across developed and emerging markets: Joining together JDE Peet's global reach with KDP's single-serve coffee leadership in North America, the world's largest coffee market.
- Unparallelled portfolio across all coffee segments, channels and price points: Focused strategy and diversified product mix position the platform for enhanced organic growth and resilience.
- Global manufacturing footprint of 40+ facilities and local route-to-market expertise: Ability to rapidly scale next-generation coffee innovation across more brands and markets by leveraging a sophisticated supply chain, breadth of talent and local market experience.

Attractive, reliable growth model: Steady and resilient revenue growth driven by focused execution and innovation, plus strong margins with upside potential, including approximately $400M in expected cost synergies. Together with robust cash flow generation, Global Coffee Co. will be set up for strong and consistent EPS growth and shareholder returns, including a compelling dividend.

Beverage Co.: Growth-Oriented, Agile Beverage Challenger
KDP has significantly evolved its refreshment portfolio and positioned it for fast growth, with a consumer-obsessed approach and leading innovation driving multi-year share gains. As an independent company, Beverage Co. will benefit from its:

Iconic mega-brands and rapid expansion into high-growth categories: The United States' #1 flavored carbonated soft drink portfolio led by powerhouse $5 billion+ brand Dr Pepper and $1 billion+ brand Canada Dry, iconic favorites like 7UP and A&W, and more than $3 billion in high-growth categories like energy and functional beverages.1 Plus, leading positions in Mexico, including Peñafiel, the country's #1 mineral water, and in Canada, across carbonated soft drinks and fast-growing ready-to-drink alcohol and low- and no-alcohol alternatives.

Proven build, buy, partner model, propelled by preferred partner credentials: A capital- efficient model and track record of successful partnerships with founders enables Beverage Co.'s portfolio to evolve in response to changing consumer preferences.

A robust DSD platform with opportunities to expand: Momentum to be supported by Beverage Co.'s critical DSD assets in the United States and Mexico, with continued future scaling opportunities.

Industry-leading revenue growth and strong margins: Strong free cash flow and capital-efficient growth model to support dynamic capital allocation, including investing in organic and inorganic growth, a competitive dividend and other opportunistic cash returns to shareholders.

Upon completion of the acquisition of JDE Peet's and until the intended separation is complete, the combined company will be led by KDP's management team, including CEO Tim Cofer and CFO Sudhanshu Priyadarshi.

Upon completion of the separation, Cofer will become CEO of Beverage Co. and Priyadarshi will become CEO of Global Coffee Co. Rafa Oliveira will continue to serve as CEO of JDE Peet's until the closing of the acquisition. Additional members of leadership and Boards of Directors for both companies will be announced at a later date.

The global headquarters for Global Coffee Co. will be located in Burlington, Mass., and its international headquarters will be in Amsterdam, the Netherlands. Beverage Co. will be headquartered in Frisco, Texas.