Starboard Value takes stake in Keurig Dr Pepper amid JDE Peet's buyout

Oct 13 (Reuters) - Activist investor Starboard Value has built a stake in Keurig Dr Pepper KDP.O after the beverage company made an acquisition to strengthen its coffee business that investors disliked, two people familiar with the matter said on Monday.

The hedge fund began building its position after Keurig Dr Pepper announced plans to acquire European coffee maker JDE Peet's JDEP.AS for about $18 billion.

Starboard has been holding private meetings with Keurig's management in recent weeks, the Financial Times, which first reported the news, said.

Starboard could not be reached by Reuters for comment.

News of Starboard's push for changes at Keurig Dr Pepper comes roughly six weeks after rival beverage company PepsiCo PEP.O faced another activist, Elliott Investment Management.

Keurig Dr Pepper's shares rose about 3% on Monday, after falling nearly 24% since the announcement of the deal.

The Keurig deal, announced in late August, proposed splitting the merged entity's coffee operations and other beverage businesses into two separate U.S.-listed companies, as the Dutch company would be delisted from the Amsterdam stock exchange.

It also aimed to create $400 million in annual cost savings, allowing the new entities to fare better against rising U.S. tariffs against coffee-producing nations and other trade rivals.

The transaction would partly reverse a 2018 merger that created Keurig Dr Pepper by combining Keurig Green Mountain and Dr Pepper Snapple, allowing investors to focus on a single segment rather than a bundle of diverse products.

JDE Peet's is majority owned by a unit of the billionaire German Reimann family's investment firm JAB Holding, which also owns a 4.4% stake in Keurig and will hold nearly 5% in both follow-up companies after the acquisition and subsequent spinoff.

The exact size of Starboard's stake in Keurig could not immediately be established. The sources familiar with Starboard's efforts said that discussions with the company had so far focused on improving execution and restoring investor confidence.