EUROPE IS set to have its first pure-play coffee and tea company when US food group Sara Lee spins off Douwe Egberts Master Blenders 1753 on Euronext in Amsterdam this month.
The new company, which is expected to have a market capitalisation of €4 billion-€6 billion, will be spun off on June 28th and begin official trading on July 9th.
Trading on the grey market starts on June 12th.
Some analysts and industry players say the spin-off could make the company more vulnerable to a takeover. The company has said it was committed to investing in advertising and innovation in the business, which has previously been run as a cash cow.
The company has coffee sales of about $3.3 billion, ranking third behind Nestlé of Switzerland, with $12 billion, and Kraft of the US at $6 billion.
Private label also has a big part of the market and is, in several regions, Douwe Egberts’ biggest competitor.
Sara Lee has a market capitalisation of $12.2 billion and a net debt of $1.4 billion at fiscal year-end, of which $500 million will stay with Douwe Egberts.
