Keurig Dr Pepper (KDP.O) announced on Monday that it will acquire Dutch coffee company JDE Peet’s (JDEP.AS) for €15.7 billion ($18.4 billion) in cash, representing a 20% premium to JDE Peet’s stock market valuation at the end of last week. Shares of JDE Peet’s surged 18% in early trading, marking their best day on record.

The merged entity plans to split into two separate U.S.-listed companies: “Beverage Co.” and “Global Coffee Co.” Beverage Co., with annual net sales of more than $11 billion, will focus on North America’s $300 billion refreshment market, while Global Coffee Co., with around $16 billion in combined net sales, will target the $400 billion global coffee industry. Keurig’s CEO Tim Cofer will head Beverage Co., while CFO Sudhanshu Priyadarshi will lead Global Coffee Co.

Keurig Dr Pepper, valued at about $48 billion, owns brands including Dr Pepper, Snapple, 7UP, and Green Mountain Coffee. JDE Peet’s, valued at €12.76 billion as of Friday’s close, owns popular coffee brands such as Jacobs, L’Or, Tassimo, and Douwe Egberts. Both companies have recently faced pressure from volatile coffee bean prices, which have surged due to unpredictable weather and a new 50% U.S. levy on Brazilian imports.

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