Mondelez spun off the coffee business and changed owners of Maxwell Coffee.

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.

The new company, called JACOBS DOUWE EGBERTS (hereinafter referred to as JDE), is expected to have annual revenues of more than 5 billion euros ($5.547 billion), Mondelez's headquarters said in a statement.

As part of the deal, Mondelez will receive about 3.8 billion euros ($4.216 billion) in cash and a 44 per cent stake in the joint venture, with the remaining 56 per cent held by Aikang, Diyi's parent company. Mondelez's stake in the joint venture is lower than the 49% previously announced, mainly because Mondelez retains its stake in Dongsuh Foods, a South Korean joint venture, compared with the previous plan.

JDE will acquire coffee brands such as Jacobs, Carte Noire, Gevalia, Kenco, Tassimo and Millicano from Mondelez International and Douwe Egberts, LOR, Pilao and Senseo coffee brands from Diyi, of which Tassimo is a capsule coffee brand jointly owned by Mondelez and Bosch. At the same time, Maxwell House outside the US market will also be managed by the new company.

These brands are relatively unfamiliar to Chinese consumers, but in some European countries, such as Germany and the Netherlands, these brands occupy the first market share. Mondelez said that with an international coffee market of more than $81 billion, the new joint venture will have a leading position in 18 countries around the world and have a "strong market image" in emerging markets. The new joint venture will be headquartered in the Netherlands.

The brands of the new company can share the existing channels in various countries, which will pose a challenge to Nestl é not only in the global market, but also in all market segments.

For the Chinese market, the merger means that Maxwell will be taken over by the joint venture. Mondelez China said in response to an interview with Interface News that Mondelez China had previously established a Zhenyin Trading Company with Diyi, which was headquartered in Shanghai, and that Maxwell's sales and market had been transferred to a new joint venture. The new company began operation on July 1, and the factory still retains the Guangzhou factory, and it is uncertain whether new brands will be introduced in the future.

The spin-off of Maxwell coffee may be good news for Mondelez China. In the Chinese market, although the development of instant coffee has slowed down, Nestl é is still the absolute leader in this market, with a market share of as much as 70%. According to Mondelez International, Maxwell's market share in China is less than 11%. China officially started production of Maxwell Coffee in 1984 and changed its name to Maxwell Coffee in 1997. Its most famous market launch was in 2009 when it sponsored the shooting of the TV series du Lala's Promotion.

When the deal is completed, Mondelez will focus more on becoming a snack food company. About 85% of the company's net income will come from products such as biscuits, chocolates, chewing gum and sweets-such as Kido, Ekoulian, Ho's, Oreo, Guozhen, Xianmai, etc. Through its stake in JDE, Mondelez can continue to profit from the future growth of the coffee category. In 2014, Mondelez had global revenue of about $30 billion, of which beverage products (including coffee) accounted for about 11% of the total.

Mondelez is introducing more snack brands in the Chinese market, including the recently launched chewing gum brand Trident Qingzhi.