Italy’s largest coffee company Lavazza has made a bid of a reported €600m for two French coffee brands, after it revealed that it was looking to enhance its international performance.
DE Master Blenders and Mondelez were forced to sell L’Or and Grand’Mère respectively to avoid violating European competition laws, after the two companies announced that they had agreed to merge in May. The merged entity became the second largest coffee company in the world behind Nestlé, with sales of more than $7bn.
The original tendering process attracted interest from coffee retailers and private equity firms from Britain, Israel and Japan – as well as Lavazza. Earlier this year, Lavazza’s chief executive, Antonio Baravalle, announced that he was looking to increase its sales outside of Italy from 46% to 70% of total revenues. These acquisitions would go part way to achieving that, and Lavazza is believed to hold €400m in cash reserves to help finance the deal.
L’Or is a brand of espresso coffee capsules suitable for use in Nestlé’s Nespresso machines, while Grand’Mère sells a range of different coffee products. Their combined turnover is estimated by some sources to be close to €300m.
The transaction would need the approval of the European Union and the two French companies’ unions before it could be completed.
© FoodBev Media Ltd 2019