D.E. Master Blenders and Mondelez International get the green light to merge

After months of deliberation, the European Commission has approved the impending merger between D.E Master Blenders and Mondelez International.

The new company will be officially entitled Jacobs Douwe Egberts and will become a kingpin of the coffee and beverage sector, holding well-known lines of confectionery and beverages as Piazza d’Oro, Oreo, Douwe Egberts and Jacobs coffee within their portfolio, not to mention a myriad of other retail favourites.

Last year, Euromonitor predicted that the company would have a 17% market share, second only to the behemoth that is Nestle.

“We are pleased the Commission has conditionally approved the creation of Jacobs Douwe Egberts,” said Pierre Laubies, the soon-to-be CEO, in an announcement released to the press.

“We are excited to create the world’s leading pure-play coffee company. Through our iconic brands, rich histories and leading technologies, we intend to give coffee drinkers what they deserve: greater choice.”

So why did it take twelve months for the European Commission to greenlight the deal? Well, basically, they were worried that consumers wouldn’t have choice and they were waiting for commitments and assurances that brands such as Carte Noire would be sold on to ensure some level of parity across the European Economic Area. Lavazza has been given first refusal, something which we touched upon earlier this year.

D.E. Master Blenders will also have to sell Merrild to an outside party in Europe and license out the Senseo brand in Austria.

Under the proposed terms, Mondelez will receive somewhere in the region of $5bn and take a 49% share in a newly formed company.

According to previously released speculative statements the new entity could bring in around $7bn in revenue on an annual basis.