Keurig Dr Pepper upsizes equity by $1.5B, targets 4.5x leverage for JDE Peet’s buy

Keurig Dr Pepper said it has added $1.5 billion of equity to the financing for its planned acquisition of JDE Peet’s, upsizing a Series A convertible perpetual preferred issuance to $4.5 billion and targeting combined net leverage of roughly 4.5 times at close. The company said the revised package will fund the transaction with approximately $9.0 billion of long-term debt, about $8.5 billion of equity capital and the assumption of roughly $5.0 billion of existing JDE Peet’s bonds.

The financing shift includes an issuance of 4,500,000 preferred shares at $1,000 each and was described by the company as a move to “introduce an additional $1.5 billion of cost-efficient equity capital” and bring on a “high-quality mix of shareholders.” Keurig Dr Pepper forecasts the deal will be about 10 percent accretive to earnings per share in its first full year and said it expects the transaction to close in early April 2026.

Anthony DiSilvestro, KDP’s chief financial officer, framed the update as a balance-sheet discipline move, saying: “Today's update demonstrates our commitment to ensuring strong and resilient capital structures at each stage of this transaction by introducing an additional $1.5 billion of cost-efficient equity capital into the financing and bringing on board a high-quality mix of shareholders who recognize the value creation opportunity ahead. Our comprehensive financing solution, combined with strong cash generation, will drive rapid deleveraging, reinforce KDP's balance sheet, and help to establish Beverage Co. and Global Coffee Co. as successful, investment-grade companies.”

The company plans to split the combined business into two independent companies provisionally named Beverage Co. and Global Coffee Co., and is aiming for operational readiness to spin Global Coffee Co. by year-end 2026. KDP said it had abandoned consideration of a partial public listing of the beverages unit and will instead pursue separation after closing. Management also said it continues to evaluate non-core asset monetization and other avenues to accelerate deleveraging.

Reports accompanying the announcement identified Apollo Global Management and KKR as co-leads of the additional $1.5 billion equity tranche and characterized the overall transaction as roughly an $18 billion acquisition. KDP’s formal exhibit filing includes the preferred issuance detail and a company signature block signed by Anthony Shoemaker, chief legal officer, general counsel and secretary, dated February 23, 2026. The filing also notes that “Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. KDP agrees to furnish supplementally a copy of any omitted portion to the SEC upon its request.”

Market response to the broader takeover plan has been mixed. Shares of Keurig Dr Pepper have fallen about 15 percent since the deal was first announced, reflecting investor concern about leverage and integration risk, and were largely unchanged in extended trading after the financing update. Earlier investor discussion and social coverage had flagged an alternative structure with a roughly $7 billion strategic investment package and a near 4.6x leverage projection; the company’s Feb. 23 filing supersedes those figures with the $8.5 billion equity total and the 4.5x leverage target.

Keurig Dr Pepper said it remains focused on executing the financing and the operational separation timeline, and that the combined balance-sheet plan plus projected cash generation will support “rapid deleveraging” after closing.