Caribou Owner Buys Another Coffee Co. for $9.8B

Caribou Owner Buys Another Coffee Co. for $9.8B

Joh. A. Benckiser has agreed to acquire D.E. Master Blenders 1753, marking its third major acquisition in the coffee and tea industry during the past year.

The German holding company that recently acquired Caribou Coffee Company, Inc., is poised to increase its investment in the coffee industry through the acquisition of yet another coffee business.

Joh. A. Benckiser (JAB) has agreed to buy D.E. Master Blenders 1753, a publicly traded coffee and tea company headquartered in the Netherlands, for about $9.8 billion. D.E. Master Blenders said its board has recommended the offer to its shareholders.

The deal marks the third major coffee acquisition that JAB has made in the past year. Last summer, the company bought a majority stake in California-based Peet’s Coffee & Tea, Inc., for about $1 billion. JAB then bought Brooklyn Center-based Caribou for about $340 million; that deal closed in January.

While there was no initial indication that the private takeover would have a substantial impact on Caribou’s work force or geographic footprint, Caribou said earlier this month that it will shutter 80 locations and convert another 88 to the Peet’s Coffee & Tea banner.

Caribou said the move will allow it to focus on Minnesota, its largest market, although the company will shutter three of its 200 Twin Cities locations. Going forward, Caribou will have 468 locations across Minnesota, North Dakota, South Dakota, western Wisconsin, Iowa, Kansas, North Carolina, Denver, and 10 international markets, the company said.

D.E. Master Blenders 1753 spun off from Sara Lee Corporation last year. It sells products under the Douwe Egberts brand, which the company describes as the leading coffee brand in the Netherlands and Belgium. Its other brands, including tea products sold under the Pickwick and Hornimans banners, are sold in the Netherlands, the Czech Republic, Hungary, Denmark, Spain, and other markets.

JAB was already an investor in the company, having acquired a 15 percent stake in the business in October. With $4 billion in annual sales, D.E. Master Blenders is the third-largest company in the global coffee-roasting sector, according to a Fox Business report.

JAB Chairman Bart Becht said in a statement that D.E. Master Blenders 1753 has “a very strong management team, fantastic brands, and enormous expertise and potential in the coffee and tea categories.” Becht indicated that the acquisition marks one more step in JAB’s ongoing growth strategy, adding that JAB will use D.E. Master Blenders 1753 as a “platform for both organic growth as well as acquisitions in the fast-moving consumer goods coffee and tea categories.”

JAB’s purchase of D.E. Master Blenders increases the company’s focus on the coffee industry, although it differs in strategy from the Caribou and Peet’s acquisitions. Rather than going head-to-head with coffeehouse chains like Caribou, D.E. Master Blenders competes with coffee makers like Nestlé.

Becht has reportedly said that JAB has no plans to combine Caribou or Peet’s with D.E. Master Blenders, saying that the brands operate in different segments of the industry.

In addition to its coffee industry holdings, JAB’s portfolio contains a number of consumer goods brands, including Switzerland-based luxury leather goods company Labelux. It also has a majority stake in Coty, Inc., a New York-based beauty products company.

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