The company said lowering debt is intended to strengthen the investment-grade ratings profile of both businesses and give each more financial capacity to pursue its strategic priorities. The planned separation would create a pure-play coffee company featuring Peet’s and Keurig, alongside a refreshment-beverages company.

Keurig Dr Pepper also intends to give the underwriters a 30-day option to buy up to an additional $300 million in common stock. Goldman Sachs and Morgan Stanley are joint book-running managers for the offering.