The news: Keurig Dr Pepper will acquire JDE Peet’s for €15.7 billion ($18.4 billion) to revive its struggling coffee arm before splitting into two public companies. The deal will create a coffee powerhouse by merging KDP with JDE Peet’s global brands that include Peet’s, L’OR, Jacobs, and Douwe Egberts.

Our first take: The deal signals Keurig Dr Pepper’s belief that in today’s tough coffee market, bigger is better.

Keurig Dr Pepper posted flat US coffee sales in Q2 and faces rising green coffee costs as prices increase due to tariffs and weak crops. Peet’s, meanwhile, beat first-half revenue estimates and raised its full-year outlook. Together, the companies aim to unlock $400 million in synergies over three years and form Global Coffee Co., with $16 billion in annual sales—making it the world’s largest pure-play coffee company (and second overall behind Nestlé).

Scale and focus may help the combined company outmuscle rivals, but the real test is brand integrity. If Peet’s and its peers lose their edge and blur into “corporate coffee,” the upside of this deal could evaporate fast.

This is our immediate perspective. We’re actively developing this story throughout the day with more research and data from the EMARKETER database. Our in-depth analysis will be included in our client-only Briefings. Non-clients can click here to get a demo of our full platform and coverage.

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