Mondelez and DE Master combining coffee businesses

Published on NewsOK Modified: May 7, 2014 at 10:43 am •  Published: May 7, 2014
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DEERFIELD, Ill. (AP) — Mondelez and D.E. Master Blenders will link their coffee businesses together as Mondelez concentrates increasingly on its snack foods division and cost cutting.

The deal is part of a $3.5 billion restructuring program underway at Mondelez that is projected to create $1.5 billion in savings by 2018. The company said that the restructuring is expected to include some job cuts, but it did not specify how many positions or where.

Shares of Mondelez rose more than 7 percent in midday trading Wednesday.

Mondelez, which makes Oreo and Chips Ahoy cookies, Trident gum and Cadbury chocolate, split from Kraft Foods Group Inc. in late 2012.

The newly formed coffee producer will sell Gevalia, Tassimo and Jacobs, which are Mondelez brands, and Senseo and Douwe Egberts from D.E. Master Blenders, formerly the Sara Lee coffee business.

The new company, with annual revenue of more than $7 billion, will be called Jacobs Douwe Egberts and it will be headquartered in the Netherlands.

Mondelez International Inc. had about $3.9 billion in revenue in 2013, while D.E. Master Blenders 1753 B.V. had approximately $3.4 billion.

About 85 percent of overall revenue at Mondelez will come from its snacks once the coffee deal is complete, the company said.

The deal only includes Mondelez's coffee portfolio outside of France.

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