EU Approves DE Master Blenders And Mondelēz Coffee Business Merger

AMSTERDAM -- D.E Master Blenders 1753 B.V. and MondelÄ"z International Inc. received conditional approval from the European Commission to combine their coffee businesses. The companies expect to complete the transaction in 2015. It is expected to be the world's leading "pure play" coffee company (publicly traded and focused on a single business), but Nestlé will remain the world's coffee leader.

The joint venture, announced a year ago, called Jacobs Douwe Egberts (JDE), would combine Mondelez's coffee brands such as Kenco and Gevalia and DE Master Blenders' L'Or, Pilao and Senseo brands into a new Netherlands-based company called Jacobs Douwe Egberts.

The European Commission's approval follows JDE's assurance to divest the Carte Noire brand in Europe, the Merrild brand in Denmark and the Baltics, and licensing of the Senseo brand to a third party in Austria.

JDE is expected to have annual revenues of more than €5 billion ($5.57billion) and hold the No. 1 or No. 2 position in more than18 countries across Europe, Latin America and Australia.

"The combination of our coffee business with that of D.E Master Blenders 1753 creates a new global leader in the coffee category with a fantastic portfolio of technology platforms and global and local brands," said Mondelez chairman and chief executive Irene Rosenfeld. "The partnership will allow us to continue to participate in the growth of the coffee category, while enabling us to focus our resources on our core snacks categories of chocolate, biscuits, gum and candy."

Upon the transaction's closing, MondelÄ"z International will receive cash of approximately €4 billion ($4.47 billion) and a 49% equity interest in Jacobs Douwe Egberts. Acorn Holdings B.V., owner of D.E Master Blenders 1753, will hold a majority share in JDE and will have a majority of the seats on the board, which will be chaired by current DEMB chairman, Bart Becht. MondelÄ"z International will have certain minority rights.

The Jacobs Douwe Egberts leadership team will be comprised of executives from both D.E Master Blenders 1753 and MondelÄ"z International.