Keurig Dr. Pepper announced it is acquiring JDE Peet's in a news release on Monday, Aug. 25

Keurig Dr Pepper will acquire JDE Peet’s, a Dutch company that operates brands like Peet’s Coffee and Stumptown Coffee Roasters, in a deal worth $18 billion, the companies announced on Monday, Aug. 25.

It's the largest acquisition of a European business within the last two years. Some of JDE Peet’s brands include Jacobs, L’Or, Tassimo and Douwe Egberts. On Friday, Aug. 22, the company was valued at €12.76 billion, or around $14.87 billion.

Keurig is worth about $48 billion.

The deal is expected to save the companies $400 million in anticipated cost synergies over the next three years.

Here's what to know about the acquisition.

Deal comes while coffee prices rise

The acquisition is a strategic move to establish a global coffee leader that can rival competitors like Nestlé, the companies said in a news release. They’ll be combining portfolios at a time when consumers are paying more for their coffee than they did a year ago, U.S. Bureau of Labor Statistics data shows.

In July, coffee prices rose 14.5% year over year, according to the agency, with a pound of ground coffee hitting $8.41. Meanwhile, food prices were 2.9% higher compared to a year ago.

The surge is due to a 50% tariff President Donald Trump imposed on beans from Brazil, in addition to droughts plaguing regions for notable coffee growers.

What will happen to the companies after the acquisition?

Once the acquisition closes, the companies said they plan to separate into two independent, U.S.-listed publicly traded companies, Beverage Co. and Global Coffee Co.

Global Coffee Co. has about $16 billion in combined annual sales, while Beverage Co. has more than $11 billion in yearly net sales. Beverage Co. will focus on North America’s $300 billion beverage market, while Global Coffee Co. will participate in the $400 billion coffee market.

Once the acquisition is finalized, JDE Peet’s will be delisted from the Amsterdam stock exchange. Keurig Dr Pepper stated it intends to pay JDE shareholders €31.85 per share, representing a 33% premium to the company’s stock price.

Shares of Keurig Dr Pepper (KDP) traded down 8% on Monday, Aug. 25.

In 2018, Keurig Green Mountain and Dr Pepper Snapple merged to create Keurig Dr Pepper. The acquisition will partially reverse the merger, giving investors an opportunity to focus on a narrower scope of products.

Contributed: Reuters

Michelle Del Rey is a trending news reporter at USA TODAY. Reach her at mdelrey@usatoday.com.

This article originally appeared on USA TODAY: Keurig Dr Pepper to buy coffee company JDE Peet's: What to know

Reporting by Michelle Del Rey , USA TODAY / USA TODAY

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