Dive Brief:
- Mondelez International Inc. and D.E Master Blenders 1753 B.V. have earned merger approval from European Union regulators.
- To appease regulators, Mondelez will sell its Carte Noire business, while Master Blenders brands will see some changes: it will shed Merrild and license Senseo.
- The coffee business merger will create the world's leading pure-play coffee company, Jacobs Douwe Egberts, worth about $7 billion. The deal is forecast to close in 2015.
Dive Insight:
Initial regulator concerns included higher prices for coffee products in France, Denmark, and Latvia and higher prices for filter pads in Austria and France. Now that the merger is approved, Jacobs Douwe Egberts will hold the No. 1 or No. 2 position in over 18 countries in Europe, Latin America, and Australia with a portfolio of both global and local brands. Per the terms of the merger, Mondelez will receive about $5 billion in cash and a 49% equity stake.
Irene Rosenfeld, chairman and CEO of Mondelez International, said, "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."