$10 Billion Offer for D.E Master Blenders 1753

April 5, 2013
Former part of Sara Lee eyed by European fund Joh. A. Benckiser.

The European investment group that recently bought Peet's Coffee & Tea and Caribou Coffee is in talks to acquire D.E Master Blenders 1753, the European coffee company spun off by Sara Lee Corp. The offer is nearly $10 billion.

Joh. A. Benckiser (JAB) manages the investments of Germany's wealthy Reimann family, the Wall Street Journal reported. Its holdings also include shoemaker Jimmy Choo Ltd. and perfume maker Coty Inc. Last year, JAB bought U.S.-based Peet's Coffee for around $1 billion and two months later acquired Caribou Coffee for $340 million.

The offer for D.E Master Blenders (DEMB) is € 12.75 per share. The coffee company’s board allowed JAB and its advisers to conduct due diligence, while DEMB also evaluates JAB's non-binding proposal. JAB already owns a 15 percent stake in DEMB.

D.E Master Blenders went public when spun off in June 2012 by then Sara Lee Corp., just before the latter renamed itself Hillshire Brands. D.E. stands for Douwe Egberts, its leading (but European-only) coffee brand, and 1753 was the year that predecessor company came into existence. It’s headquartered in Amsterdam and is listed on theDutch stock exchange.

DEMB is No. 3 in the global coffee-roasting sector with $4 billion in annual sales, behind Nestlé at $12 billion and Kraft Foods Group with $6 billion, according to the Journal.

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