01—Abstract
Summary
Summary of the 8-K filed February 23, 2026. Cited figures are marked; the original filing is the authoritative source.
On February 23, 2026, Keurig Dr Pepper Inc. (KDP) entered into a Transaction Agreement to form a Pod Manufacturing joint venture (Keurig JV, LP) with KDP-affiliated entities and an investment vehicle held by funds managed by Apollo Global Management, KKR and Goldman Sachs Asset Management.
Under the agreement, KGM Manufacturing LLC merges into the JV, Keurig Canada ULC is contributed, and the investor vehicle contributes $4.0 billiona for a 49% limited partnership interest, while KDP retains the remaining 51%. The net proceeds are intended to help fund KDP's previously announced acquisition of JDE Peet's N.V. Closing is expected substantially concurrently with that acquisition and is subject to limited customary conditions, with an outside date of March 3, 2027.
Ancillary agreements have KGM operate the JV's assets under performance standards, purchase K-Cups and other single-serve products exclusively from the JV, and receive an exclusive IP license, with KDP providing a parent guaranty. The company also amended its Preferred Investment Agreement to increase the Series A Convertible Perpetual Preferred Stock investment to 4,500,000 shares at $1,000b per share, or $4.5 billion in aggregate, up $1.5 billion from the October 27, 2025 agreement. The accompanying press release (Exhibit 99.1) states the increase is backed by an anchor commitment from accounts advised by T.
Rowe Price Investment Management, that the key terms are substantially unchanged (initial conversion price of $37.25c per share and a 4.75% preferred dividend rate), and that the company will no longer consider a partial IPO of the future Beverage Co. The press release also updates the financing plan for the JDE Peet's acquisition: a targeted close in early April 2026, approximately $9 billion of long-term debt and $8.5 billion of equity capital, assumption of about $5 billion of existing JDE Peet's bonds, and projected combined net leverage of 4.5x as of June 30, 2026. Management states the transaction remains forecast to be approximately 10% EPS accretive in its first full year. Separation into Beverage Co. and Global Coffee Co. is contingent on leverage and market conditions, with operational readiness targeted by year-end 2026.
02—Key points
Key Highlights
- Entered a Transaction Agreement for a Pod Manufacturing JV in which an investor vehicle contributes $4.0 billion for a 49% limited partnership interest, with KDP retaining 51%.
- Amended the Preferred Investment Agreement to raise the Series A Convertible Perpetual Preferred Stock to $4.5 billion (4,500,000 shares at $1,000 per share), an increase of $1.5 billion.
- Preferred terms are substantially unchanged, with an initial conversion price of $37.25 per share and a 4.75% preferred dividend rate, per the press release.
- Proceeds from the JV investment are intended to fund part of the JDE Peet's N.V. acquisition, targeted to close in early April 2026.
- Planned acquisition financing consists of approximately $9 billion of long-term debt, $8.5 billion of equity capital and assumption of about $5 billion of JDE Peet's bonds, with projected combined net leverage of 4.5x.
- KDP will no longer consider a partial IPO of Beverage Co. because of the preferred upsize.
- Ancillary agreements require KGM to buy K-Cups and other single-serve products exclusively from the JV and to meet minimum performance standards, with KDP providing a parent guaranty.
03—Questions
Frequently Asked Questions
What is the Pod Manufacturing joint venture and how is it structured?
The JV is Keurig JV, LP, into which KGM Manufacturing LLC merges, Keurig Canada ULC is contributed, and an investor vehicle contributes $4.0 billion for a 49% limited partnership interest. KDP and its affiliates retain the remaining 51%. The JV will own or have access to the manufacturing assets used to produce K-Cup pods and other unbrewed single-serve beverages in the U.S. and Canada.
Why did the preferred investment increase, and on what terms?
The Convertible Preferred Stock investment increased by 1,500,000 shares, or $1.5 billion, to a total of $4.5 billion. The press release attributes the upsize to an anchor commitment from accounts advised by T. Rowe Price Investment Management alongside additional participation from Apollo, KKR and other long-term investors. The initial conversion price is $37.25 per share and the preferred dividend rate is 4.75%.
How does the JV investment relate to the JDE Peet's acquisition?
The JV intends to use the net proceeds from the $4.0 billion Co-Investor Contribution to fund a portion of KDP's previously announced acquisition of JDE Peet's N.V. The parties expect the JV closing to occur substantially concurrently with the acquisition, which is targeted for early April 2026 according to the press release.
What conditions and termination rights apply to the Transaction Agreement?
Closing is subject to limited customary conditions. Either the Keurig Partners or the JV Investor Partner may terminate if closing does not occur on or before March 3, 2027, if the other party materially breaches and does not cure within the cure period, or if a law or order prevents the transactions.
What obligations does KGM take on under the ancillary agreements?
KGM will operate and maintain the JV's assets under minimum performance standards covering production and uptime, and will buy K-Cups and other unbrewed single-serve products exclusively from the JV in the U.S. and Canada, subject to agreed exceptions, at manufacturing cost plus a margin. KGM may also owe shortfall payments if it misses volume targets after the twentieth and thirtieth anniversaries of closing, and KDP provides a parent guaranty of the obligations.
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