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Mondelez International, D.E Master Blenders 1753 to merge coffee businesses

Companies announce intention to launch new company Jacobs Douwe Egberts with revenues projected at more than $7 billion.

May 13, 2014
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Mondelez International, D.E. Master Blenders 1753 to merge coffee businessesOn May 7, snacking and beverage provider Mondelez International and D.E Master Blenders 1753, a leading coffee and tea company, announced their intention to combine and create a new coffee business called Jacobs Douwe Egberts.

According to Mondelez, whose brands include Gevalia and Carte Noire, the new company will be based in the Netherlands and hold leading market positions in more than two dozen countries. D.E Master Blenders 1753 includes brands such as Douwe Egberts and L’OR.

“We’re delighted with this transaction and the substantial value we expect to create for our shareholders,” says 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.”

With each company taking in more than $3 billion annually, the new pure-play company is projected to have revenues of more than $7 billion.

“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,” says Pierre Laubies, CEO of D.E Master Blenders 1753.

Laubies is the prospective CEO of the new combined company.

Through the agreement, Acorn Holdings B.V., owner of D.E Master Blenders 1753, made an offer to receive Mondelez coffee business in France.

Transactions remain subject to approval.

According to the companies, Mondelez will receive $5 billion in cash and 49 percent equity interest in the new company upon completion of the transaction, which is expected to be in 2015.
The transactions remain subject to approval.

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