An investor group led by Joh. A. Benckiser GmBH, Ludwigshafen, Germany, has made an offer to acquire the D.E Master Blenders 1753 coffee company for €12.50 ($16.36) per share. The total offer is valued at €7.5 billion ($9.8 billion). The board of D.E.M.B. has expressed its support of the offer.
“After having carefully and diligently assessed J.A.B.’s offer, resulting in today’s intended offer, the board fully supports and unanimously recommends this offer to the shareholders for acceptance,” said Norman Sorensen, non-executive chairman of the board for D.E.M.B. “The offer price is a clear reflection of the value D.E.M.B. represents.
The fact that J.A.B. will use D.E.M.B. as a platform for further growth and has guaranteed to keep its headquarters, R.&D. and major production sites in the Netherlands, gives the board confidence that this offer is in the best interest of employees, shareholders and other stakeholders.”
D.E Master Blenders 1753 is a product of the Sara Lee Corp. spinoff and is primarily made up of Sara Lee’s international coffee interests. The company owns such brands as Douwe Egberts, Café Noir, Senseo and Pickwick teas.
“About two years ago, we set out to create a leading pure play coffee and tea company, spinning off from Sara Lee with an ambitious strategy for growth,” said Jan Bennink, interim chief executive officer of D.E.M.B. “Today's announcement confirms the value of what has been achieved to-date and the high potential of the platform we have built for the future.
“J.A.B.’s intended offer is testimony to the strength of D.E.M.B.'s brands, their leading market positions and the promising strategy and innovation pipeline the company has developed. Within the proposed new ownership structure, D.E.M.B. will be central to the creation of one of the world’s leading coffee and tea companies. This will provide additional opportunities to expand our product portfolio enhance our competitive position and create new opportunities for our employees.”
J.A.B. has been on a coffee-buying binge during the past few months. In late October the company acquired Peet’s Coffee & Tea, Emeryville, Calif., for approximately $1 billion. In December the company agreed to acquire the Caribou Coffee Co., Minneapolis, for $342 million.
“J.A.B. and its partners intend to use D.E.M.B. as their platform for both organic growth as well as acquisitions in the fast moving consumer goods coffee and tea categories,” said Bart Becht, chairman of J.A.B.
In a statement, both companies said the offer is driven by the significant growth opportunities J.A.B. and its partners see in the global coffee and tea category and the strategy D.E.M.B. has set out to become a leading pure play coffee and tea company.
J.A.B. will finance the offer through a combination of approximately €3 billion in debt and an estimated €4.9 billion in equity. The offer is subject to customary conditions and regulatory approvals.
