Lavazza, the world’s seventh-biggest coffee roaster, said it presented a binding offer to Koninklijke Douwe Egberts to buy the brand Carte Noire, leader in the French coffee market with around 20% of the retail channel.
In the statement, the Italian company didn’t disclose the value of its bid. According to Reuters, two sources said the Italian company would pay around 800 million euros (US$872 million).
The operation remains subjected to regulatory and antitrust approval.
Under the offer, family-owned Lavazza would take control of Carte Noire’s roast and ground coffee, filter pads and Nespresso-compatible capsules business in the European Economic Area (except for Carte Noire instant coffee, T-Discs and products that are not meant for households) as well as the company’s state-of-the-art plant in Lavérune, near Montpellier.
Founded in 1978, Carte Noire is the biggest coffee brand in France. The purchase would make France Lavazza’s second-biggest country behind Italy, where it has a market share of about 45 percent.
The French premium brand was put on the block in February to soothe European Commission concerns over competition after U.S.-based group Mondelez International and Dutch group D.E Master Blenders announced a merger to form JDE, the world’s biggest pure play coffee company, with annual revenue exceeding 5 billion euros.
Lavazza had previously made a binding offer for two French brands – l’Or and Grand’Mère – for 600 million euros.
But it had to change its target after the EU Commission told Mondelez International and D.E. Master Blenders the disposal was not enough to approve their merger.
The two companies agreed instead to sell the Carte Noire and Merrild business across the European Economic Area. Lavazza received exclusive rights to buy Carte Noire, but agreed last month to buy DEMB’s Merrild instead.
Lavazza is now unexpectedly back in the race. Private equity funds PAI, BC Partners and Cinven also made bids for the French brand
“With this strategic acquisition we believe we can make an important step ahead to become a global company,” said chief executive Antonio Baravalle (in the picture).
Baravalle said last year that Lavazza planned to increase its annual revenues, both organically and through acquisitions, by almost 50 percent to 2 billion euros within 10 years to avoid “being swallowed” by bigger competitors.