JAB Scores $9.8B Deal for Coffee Maker DE Master Blenders

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Published April 12, 2013

| FOXBusiness

An investor group led by Joh. A. Benckiser agreed to acquire D.E. Master Blenders for $9.8 billion, giving the firm a larger footprint in the coffee market.

D.E. Master Blenders, which owns the Douwe Egberts coffee brand, announced two weeks ago that it was approached by JAB about a potential deal. The company was spun off in June by the former Sara Lee, which is now Hillshire Brands (HSH).

JAB’s latest deal adds to its coffee portfolio that already includes U.S.-based Peet’s Coffee and Caribou Coffee.

The firm is paying a 36% premium over D.E. Master Blenders’ average share price for the last three months. JAB already owns a stake of roughly 15% in the Amsterdam-based coffee maker, which is the third-largest company in the global coffee-roasting sector with $4 billion in annual sales.

Nestle, the largest coffee maker, records annual sales of about $12 billion. Mondelez International (MDLZ), a Kraft Foods Group (KRFT) spinoff, is second with $6 billion.

JAB Chairman Bart Becht said there are no plans to combine Peet’s and Caribou with D.E. Master Blenders, citing a lack of synergies. He added that the brands operate in different segments of the industry.

JAB also owns a variety of businesses such as shoemaker Jimmy Choo and perfume maker Coty, which made a $10.7 billion bid last year to acquire Avon Products (AVP) but withdrew the offer in May.

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http://www.foxbusiness.com/industries/2013/04/12/jab-scores-8b-deal-for-coffee-maker-de-master-blenders/