German consortium buys Nestle rival Green Mountain Coffee for $13.9 billion
On December 7th, Joh.A.Benckiser GmbH (JAB) announced the acquisition of Keurig Green Mountain Coffee (Keurig Green Mountain) for $13.9 billion.
The news surprised many analysts and investors. Green Mountain Coffee bags and single-cup coffee makers once redefined the American market, but last year, single-cup coffee makers faced the dilemma of market saturation, and sales of Green Mountain Coffee stagnated. In the fiscal year ended September, revenue at Green Mountain fell 4% to $4.52 billion, while profit fell 16% to $498 million.
JAB, the investment company of Germany's Reimann family, owns luxury brands Bally, Jimmy Choo PLC and Coty Inc, a maker of beauty products. This year is the third year it seeks to dominate the global coffee industry. Green Mountain Coffee, which has a large share of the single-cup coffee maker market in the United States, has naturally become the next target of the Lehmann family. Green Mountain accounts for 20% of the packaged coffee market in the United States, according to Euromonitor International.
Under the terms of the deal, Green Mountain shareholders will receive $92 in cash per share. Before that, JAB had acquired Jacobs Douwe Egberts Coffee Group, which owns international brands such as Bach Espresso and Bravo. In addition, JAB also acquired Peet's Coffee&Tea. This year, Bitz Coffee has acquired Stumptown Coffee Roasters Coffee, Caribou Coffee Company, Italian espresso (Espresso House), and Baresso Coffee A Maple S.
Coca-Cola, which owns 17% of Green Mountain Coffee's largest shareholder, was thought to buy Green Mountain Coffee directly. But Coca-Cola said it was very much in favor of the deal. Coca-Cola fully supports the deal. " "We are looking forward to working with JAB," said Muhtar Kent, president of Coca-Cola. It is reported that Coca-Cola made a profit of $25.5 million from the deal.
When Green Mountain Coffee sales are falling and the outlook for next year is bleak, investors are all sarcastic about it.
However, analyst Phil Terpolilli believes that this weak state is about to be changed by JAB, because JAB has long been known in the coffee industry for being good at attracting public attention.
JAB said Green Mountain Coffee still operates as an independent company headquartered in Waterbury, Vermont.
JAB bought Green Mountain Coffee along with other investment companies that have been involved in the acquisition of Jacobs Douwe Egberts, including Mondelez International (Mondelez International) and BDT Capital Partners.
Analysts believe JAB may see an excellent opportunity to push Green Mountain Coffee to Europe, where it has yet to compete with Nestl é.
Mark Astrachan, an analyst at Stifel Capital Markets, believes the deal could pose a threat to Green Mountain's relationship in the industry. Green Mountain Coffee has worked with Starbucks to make K-cup coffee bags. And Starbucks is indeed a competitor to JAB's companies.
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On the evening of July 2, Oreo and Mondelez International, the parent company of Lido, announced that it had completed the previously announced merger of its coffee business with D.E.Master Blenders 1753. Mondelez will take a stake in its coffee brand and Diyi, which specializes in coffee and tea, to form a new coffee company. Mondelez headquarters said in a briefing that the new company is called
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