Netherlands: Mondelez International & D.E Master Blenders 1753 form new coffee business

Mondelez International has announced that it has reached an agreement with D.E Master Blenders 1753 B.V. to combine their respective coffee businesses to create a new "pure-play" company to be known as Jacobs Douwe Egberts.

The new company, which will have annual revenues of more than $7 billion, will be based in the Netherlands and will bring together the 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.

According to the Financial Times, the deal merges the world's second and third-largest coffee companies and the resultant business will hold market leading positions in more than 24 countries.

“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,” said 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.”

Upon completion of all proposed transactions, Mondelez International will receive cash of approximately $5 billion and a 49% equity interest in Jacobs Douwe Egberts. Subject to regulatory approvals, the transactions are expected to be completed in the course of 2015.

Source: Mondelez International / Financial Times