Master Blenders, Mondelez to form top global coffee company
Coffee giants Dutch D.E Master Blenders and US-based Mondelez on Tuesday announced a multi-billion-dollar deal to create the world's top coffee supplier to compete with giants in the expanding coffee capsule market.
The two groups are to combine their coffee businesses "to create the world's leading pure coffee company," Mondelez and D. E Master Blenders announced in a joint statement.
The deal will see snack market leader Mondelez, which owns brands such as Jacobs and Carte Noire receive a $5 billion (3.5 billion euro) cash payment and a 49-percent stake in the new Netherlands-based company, to be called Jacobs Douwe Egberts.
The new company "will hold leading market positions in more than two dozen countries and will have a strong emerging market presence, giving it significant revenue synergy opportunities," the statement added.
The new entity would have annual sales of more than $7 billion.
Amsterdam-based D.E Master Blenders owns several global coffee and tea brands including Douwe Egberts, Senseo and Pickwick and traces its origins back to 1753.
Mondelez, headquartered in Deerfield Illinois, last year garnered revenue of $35 billion dollars and apart from its coffee business also own other "billion-dollar-brands" such as Cadbury, Oreo and Nabisco.
Mondelez is a Standard Poor's 500 and NASDAQ 100 company.
The combined new company will compete with beverage giant Nestle in the lucrative coffee capsule market, analyst Tom Muller told AFP.
"The coffee capsule market, especially in the United States and Europe is a strong growth area," said Muller, a food and beverage market specialist at Amsterdam's Theodoor Gilissen private bank.
"In order to be a world leader and compete against a coffee capsule market leader like Nestle, you need coffee volumes and marketing power. This I think is the idea behind this deal," he said.
© 2014 AFP