Mondelez International is combining its coffee business with Dutch company DE Master Blenders 1753 to create a new pure-play coffee company called Jacobs Douwe Egberts (JDE) which will be based in the Netherlands.
Mondelez International will receive cash of approximately $5 billion and a 49 percent equity interest in Jacobs Douwe Egberts.
According to the companies, the new entity will have annual revenues of more than $US7 billion and will hold leading market positions in more than two dozen countries. In 2013, Mondelez’s coffee business generated approximately $US3.9 billion in revenue, and D.E Master Blenders' generated approximately $US3.4 billion.
The deal will reportedly enable Mondelez to focus on its snack portfolio and better compete with Nestle in the coffee space.
In Australia, Mondelez sells the Carte Noire coffee brand and DE Master Blenders brands include Moccona, Harris and Espresso di Manfredi.
“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 DE Master Blenders 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.”
The merger is expected to be completed next year, subject to limited closing conditions, including regulatory approvals.
