Aiming to build a coffee conglomerate, Joh A. Benckiser, the investment arm of billionaire Reiman family, is set to acquire D.E. Master Blenders 1753 NV for about 7.5 billion euros ($9.8 billion).
JAB will pay 12.50 euros a share in what is onsidered as the coffee industry's biggest deal ever,
JAB bought Senseo maker, which was spun off by Sara Lee Corp last year, giving it a platform to expand its coffee business. It also bought U.S.-based coffee chains Peet's Coffee & Tea Inc and Caribo Coffee Co.
Last year JAB took a stake in Master Blenders last year as a financial rather than strategic holding, with the company not yet decided whether it wanted to buy all of the company or not.
According to JAB chairman Bart Becht, the decision to buy the whole company came later subsequent to a strategic review. JAB's offer is fully financed using a combination of about 3 billion euros in debt and about 4.9 billion euros in equity.
The company has fully committed debt financing from Bank of America Corp., Citigroup Inc., Rabobank and Morgan Stanley, and has also secured equity financing from parties including JAB Forest BV and BDT Oak Acquisition Vehicle.
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