Dutch coffee maker D E Master Blenders in takeover talks with Joh A Benckiser
30 March 2013
D E Master Blenders 1753, the maker of Pickwick tea and Senseo single-serve coffee pads, today said that it was in takeover talks with a group led by German private investment firm Joh A Benckiser (JAB) in a deal valuing the Dutch coffee and tea company, spun off by Sara Lee Corp, at €7.58 billion ($9.70 billion).
JAB, the investment vehicle for the Reimann family, which also holds stake in household products maker Reckitt Benckiser Plc and fragrance company Coty, plans to pay €12.75 a share, a 33 per cent premium to D.E Master Blenders yesterday's closing price.
The proposal is subject to due diligence and talks are ''in an early stage,'' the Amsterdam-based company said in a statement.
''Consistent with its fiduciary duty, the board of D E Master Blenders is carefully evaluating JAB's non-binding proposal. With respect to the decision making, the company's board will give due consideration to a proper decision making process, which includes avoiding any (potential) conflict of interest by executives, and in its decision making will take the interests of all stakeholders, including the shareholders, into full consideration,'' the statement added.
Last year, Vienna-based JAB's chairman, Bart Becht, had said that the company would invest in premium and unique brands in attractive growth categories like coffee.
In July last, JAB acquired Peet's Coffee & Tea Inc, for about $1 billion. This acquisition came a month after it revealed that it had acquired a 12.2-per cent stake in D E Master Blenders and might increase its stake in the future.
Five months later, JAB acquired Caribou Coffee, the second-largest company-owned premium coffeehouse operator in the US, for $340 million.
Headquartered in the Netherlands, D E Master Blenders is an international coffee and tea company, with annual sales of €2.7 billion.
Its coffee and tea products are sold in more than 45 countries and 70 per cent of its revenue comes from markets where it holds a No 1 or No 2 position.
It has an extensive range of 30 well-known tea and coffee brands. Its iconic Douwe Egberts brand, founded in the Netherlands in 1753, is the number one coffee brand in the Netherlands and Belgium, and has solid market positions in the UK and Hungary. Pilão is the number one coffee brand in Brazil, and Merrild is the favourite in Denmark.
In the Netherlands, Czech Republic, Hungary and Denmark, its Pickwick tea is the number one brand while Hornimans is the number two choice in Spain.
In the out of gome segment, which represents 23 per cent of the coffee market, D E Master Blenders is present in 18 countries and holds the No 1 or No 2 position in seven of those markets.
Sara Lee Corp, the US consumer goods giant had in 2011 acquired its Dutch partner, electronics giant Philips stake in the Senseo coffee brand, for €170 million ($223 million).
Sara Lee and Amsterdam-based Philips had formed a 50-50 joint venture in 2001 to launch the Senseo coffee brand, with Sara Lee providing fresh ground coffee pods and Philips distributing the single-serve machines.
The brand soon became a household name in the Netherlands, with more than half of Dutch and a quarter of French and German households having a Senseo coffee maker.
During the period of the JV, the two companies sold over 33 million appliances worldwide.