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.
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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 (NYSE: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 (NASDAQ:MDLZ), a Kraft Foods Group (NASDAQ: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 (NYSE:AVP) but withdrew the offer in May.