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Activist investor Starboard Value has taken a stake in Keurig Dr Pepper, coinciding with the company's announcement of its plan to acquire European coffee maker JDE Peet's for approx. $18 billion.

This latest development, first reported by the Financial Times, follows KDP's announcement in late August regarding the JDE Peet's acquisition, which aims to enhance KDP's coffee portfolio amid increasing competition in the speciality coffee market.

The acquisition is expected to lead to the separation of the merged entity’s coffee operations from its other beverage businesses, creating two distinct US-listed companies.

This restructuring is intended to improve focus and operational efficiency, particularly as JDE Peet's will be delisted from the Amsterdam stock exchange following the merger.

Keurig Dr Pepper's stock experienced a modest uptick of nearly 3% on Monday, rebounding slightly after a significant decline of approximately 24% since the acquisition announcement.

The market's reaction reflects investor concerns about the strategic implications of the deal and its potential impact on KDP's long-term growth trajectory.

While the exact size of Starboard's stake remains undisclosed, the hedge fund has engaged in private discussions with KDP's management, focusing on enhancing operational execution and restoring investor confidence.

Unlike typical activist campaigns, Starboard's approach appears to be collaborative, aiming to align with management on strategic priorities rather than pursuing a public confrontation.

The backdrop of this investment is particularly noteworthy given the recent challenges faced by KDP, including rising costs and increased competition in the beverage market.

As consumer preferences shift toward premium coffee products, KDP's acquisition of JDE Peet's positions the company to capitalise on this trend, though it also raises questions about integration and execution risks.