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JAB Holdings continues coffee consolidation with Krispy Kreme acquisition

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Earlier this week, Luxembourg-based privately-held company, JAB Holdings, continued its recent run of acquisitions within the global food and beverage industry this week, in launching a takeover bid for US doughnut maker; Krispy Kreme.

Growing coffee empire

The U$1.5 billion deal signals JAB Holding's strong intent to consolidate the global coffee industry and, in doing so, provides a strong competitor to Starbucks and Nestle SA in the retail coffee market.

JAB Holdings is the private investment vehicle for one of Europe's wealthiest business families. The company traces its roots back to Germany in the early 19th century where Johann Adam Benckiser bought a chemicals business in South-Western Germany.

Currently, the group is controlled by four family members; Matthias Reimann-Andersen, Renate Reimann-Haas, Stefan Reimann-Andersen and Wolfgang Reimann, who each hold a portion of equity in the multi-billion dollar company.

Although family members are notoriously shy, the company shot to prominence by orchestrating a string of acquisitions in the coffee space, totalling over $30 billion.

Coffee synergies

In 2012, JAB Holdings acquired Peet's Coffee and Tea. The following year it acquired Caribou Coffee and then launched a massive $9.8 billion takeover for DE Master Blenders 1753. In 2014, it merged with Mondelez International's coffee book to create the world's largest coffee brand.

It's largest acquisition to date has been the $13.9 billion purchase of single-serve Coffee provider, Keurig Green Mountain, in November 2015.

Adding donuts to its menu

The announcement earlier this week to acquire Krispy Kreme shows that JAB Holdings still sees value and growth in the US retail coffee space.

The acquisition suggests JAB Holdings will continue to develop Krispy Kreme's recent push into the coffee market. According to Krispy Kreme's 2015 annual report, doughnuts make up 89% of its retail sales. JAB Holding's will operate a similar model and ultimately compete directly with the second largest retailer of coffee in US, Dunkin' Donuts.


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