KDP will acquire Peet’s, and Dr Pepper will split from Keurig soon after to create separate coffee and beverage businesses

Keurig Dr Pepper will acquire JDE Peet’s in an all-cash deal valued at approximately $18 billion, with plans to later split into two separate companies: a global coffee business and a North American refreshment beverage company. The move essentially unmerges the 2018 merger of Keurig and Dr Pepper.

KDP CEO said the move creates two sharply focused beverage companies and create a “global coffee giant.”

By combining KDP’s expertise and market share in single-serve brewing with JDE Peet’s global coffee brands, including Jacobs, Peet’s and L’OR within the new “Global Coffee Co.” The combined $16 billion coffee business will span more than 100 countries.

For convenience services, that scale could mean greater product variety, innovation in formats such as pods, capsules and RTD coffee, and the ability to bring premium and international brands into workplaces, micro markets and vending.

On the other side, “Beverage Co.” will continue to market brands like Dr Pepper, Canada Dry, 7UP and A&W alongside growing stakes in energy, functional drinks and flavored waters. With $11 billion in annual sales and a direct-store-delivery system, Beverage Co. will concentrate on North America’s $300 billion refreshment market.

Convenience operators could benefit from a sharpened focus on and innovation that caters to shifting consumer tastes, particularly in the fast-expanding energy and functional beverage categories.