On 21st October 2024, it was announced that Luxembourg-based private equity firm JAB Holding Company had agreed to acquire an additional €2.16 billion stake in tea and coffee conglomerate JDE Peet’s. JAB Holdings purchased the stake from Mondelez International, an American food and beverages conglomerate. The 86 million shares of JDE Peet’s was acquired at a price of €25.10 per share, implying a 32% premium on its last closing share price and bolstering JAB Holding’s majority stake in JDE Peet’s to 68%. After the announcement of the deal, JDE Peet’s shares surged by 16%, reflecting positive investor sentiment regarding the deal.
JAB Holdings is an investment holding company oriented around the consumer and insurance sectors, taking majority stakes in their portfolio companies with a focus on overseeing assets. Some of their most prominent investments in the consumer space include Keurig Dr Pepper, Krispy Kreme and Pret A Manger. The bolstering of their stake in JDE Peet’s represents a further consolidation of their majority stake to 68%, allowing them to drive key strategic decisions within the business.
JDE Peet’s have also recently announced the appointment of former Kraft Heinz Company executive Rafa Oliveira as its new CEO, alluding to a potential shift in strategy to come for JDE Peet’s. Mondelez International, spun out of Kraft Foods in 2011 and the previous holder of the JDE Peet’s stake, had made it transparent since last year that their intentions were to exit their position in JDE Peet’s. In fact, they had already sold some of their stake in previously at discounted prices following a drop in JDE Peet’s full year profits.
JDE Peet’s is an American-Dutch business holding company with a strong portfolio of over 50 brands, predominantly spanning the coffee, tea and hot chocolate markets. The business was initially formed in 2015 through a merger between Mondelez International’s coffee division and Douwe Egberts, following which it floated on the Euronext Amsterdam Stock Exchange in 2020. As part of the rationale behind the acquisition by JAB Holdings, they highlighted JDE Peet’s “long-term value creation prospects” and their willingness to be involved in the world’s leading pure-play coffee and tea company. JAB Holdings remains bullish on the global coffee sector and emphasised its resilience despite such recent systemic shocks.
The market sentiment on this deal has been very positive. JDE Peet’s stock had dropped by 22% from the start of this year due to uncertainty about EU sanctions on Russia, as well as the lack of a CEO. Equity research analysts had placed a buy recommendation on the JDE Peet’s stock due to this, furthered by Mondelez selling their stake at an underweight valuation. It will be interesting to observe whether the introduction of a new CEO and JAB Holdings expanding their majority stake will result in key strategic shifts for JDE Peet’s in the near future.
Written by: Siddh Patel
Sources: Reuters, Mergerlinks, JAB Holdings press release
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