Keurig Dr Pepper (KDP) has reportedly entered a deal to acquire Peet’s Coffee owner JDE Peet’s for $18 billion, reported The Wall Street Journal.

“After completing the all-cash acquisition, Keurig Dr Pepper plans to combine its coffee business, which includes its namesake single-serve coffee pods, with JDE Peet’s and spin it into a new company. The remaining beverage business would include brands like Dr Pepper, Snapple and 7UP,” wrote The New York Times.

The Times reported that the two-step transaction is aimed at effectively undoing the multibillion-dollar combination of Keurig and Dr Pepper announced in 2018.

KDP Chief Executive Tim Cofer said that the deal comes at a time of financial strength for the company. The deal aims to create stand-alone companies that have further room to grow, he said.

“This is a bold move,” Cofer said in an interview. “But we’ve got a lot of confidence in this transaction.”

In the separation, Cofer will reportedly take the helm of the global beverage unit while the current chief financial officer, Sudhanshu Priyadarshi, will head the new coffee company.

Cofer said the combination of Keurig and JDE Peet’s will boost the new company’s geographical reach. Keurig, for example, is mainly in North America, while JDE Peet’s plays in Europe, Latin America and the Middle East, the Journal wrote.

In February of this year, KDP reported strong sales and performance in the financial year of 2024. Looking at the fourth quarter of 2024, KDP saw net sales increase 5.2% to $4.1 billion.

Speaking about the energy drink segment at the time of the report, Cofer said: “We feel good that we’ve constructed a portfolio that has a right to win in energy. I remind you what I said in the prepared remarks three years ago, KDP’s share in energy was basically zero. Sitting here today, it’s over 6%, well over $1 billion in retail sales. And as I’ve said, we’ve got a double-digit share goal in the years ahead.”

Cofer said that KDP’s energy portfolio is “a series of complementary brands that can really target distinct consumer cohorts and demand spaces.” Cofer cited C4, “our large anchor brand today in the performance space;” KDP’s partnership with Black Rifle; a distribution deal with Bloom, “a female-forward brand with a very strong following;” and the acquired energy brand Ghost. “As we get deeper and deeper with Ghost, we feel great about this deal. I think it’s an attractive asset.”