Mondelez & D.E Master Blenders Announce Merger
DEERFIELD, Ill. -- The world's coffee business is set to get a new power player as the result of a deal between Mondelez International Inc. and D.E Master Blenders 1753 B.V. The companies are merging their respective coffee businesses to create an international pure-play coffee company with annual revenues of more than $7 billion.
The new company, which will be called Jacobs Douwe Egberts (JDE), will be based in the Netherlands. It will hold leading market positions in more than two dozen countries and have a strong emerging market presence, giving it significant revenue synergy opportunities in the $81-billion global coffee category, according to a joint press release issued today.
The two companies own some of the world's leading coffee brands: Jacobs, Carte Noire, Gevalia, Kenco, Tassimo and Millicano from Mondelez International, and Douwe Egberts, L'OR, Pilao and Senseo from D.E Master Blenders 1753.
"Jacobs Douwe Egberts will leverage the rich histories of both companies, combining our complementary geographic footprints, portfolios of iconic brands and innovative technologies to offer more people around the world more access to high-quality coffee and allowing the company to capitalize on the significant growth opportunities in a highly attractive market," said Pierre Laubies, CEO of D.E Master Blenders 1753 and prospective CEO of the combined company.
"We're delighted with this transaction and the substantial value we expect to create for our shareholders," added Irene Rosenfeld, chairman and CEO of Mondelez International. "By retaining a significant stake in the combined company, we'll continue to benefit from the future growth of the coffee category and share in the synergies and tremendous upside of this leading, one-of-a-kind coffee company."
In the Details
According to both companies, the deal will combine Mondelez International's wholly owned coffee portfolio (outside of France) with D.E Master Blenders 1753. In conjunction with this transaction, Acorn Holdings B.V. (AHBV), owner of D.E Master Blenders 1753, has made a binding offer to receive Mondelez International's coffee business in France.
In addition, the parties have invited Mondelez International's partners in certain joint ventures to join the new company. The transactions remain subject to regulatory approval and the completion of employee information and consultation requirements.
In 2013, Mondelez International's wholly owned coffee business generated approximately $3.9 billion in revenue, while D.E Master Blenders 1753 generated approximately $3.4 billion in revenue.
Upon completion of all proposed transactions, Mondelez International will receive cash of approximately $5 billion and a 49-percent equity interest in Jacobs Douwe Egberts, and have certain minority rights. AHBV will hold the majority share in the proposed combined company and have a majority of the seats on the board, which will be chaired by current D.E Master Blenders 1753 Chairman Bart Becht. AHBV is owned by an investor group led by JAB Holding Co. s.a r.l.
The new company's executive leadership team will be named at a later date and consist of executives from both D.E Master Blenders 1753 and Mondelez International.
The transactions are expected to be completed in the course of 2015.