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Investor brewing a coffee takeover?

German firm JAB takes over Caribou, challenges Starbucks

– Joh. A. Benckiser Group’s $340 million takeover of Caribou Coffee may be a small step in a larger plan to take on the likes of Nestle and Starbucks for leadership in the $45 billion global coffee market.

The acquisition, announced last Monday after the purchases this year of Peet’s Coffee & Tea Inc. and a stake in the maker of Douwe Egberts coffee, shows that the German investment firm may have much grander ambitions, according to Jon Cox, an analyst at Kepler Capital Markets in Zurich.

“This is bound to renew speculation that ultimately it’s interested in creating a global powerhouse in coffee – something of a Starbucks/Nespresso hybrid,” Cox said.

The investment company, which has interests in Jimmy Choo shoes and Chloe perfumes, may be aspiring to become the world’s No. 2 coffee maker, behind Nestle, according to Pablo Zuanic, an analyst at Liberum Capital.

JAB may seek to buy all of Amsterdam-based D.E. Master Blenders 1753, in which it owns a 15 percent stake, or even consider bidding for the former Kraft Foods’ global coffee business, he said.

“The bottom line is that JAB apparently really likes coffee and sees opportunities for consolidation,” Zuanic said. “It is hard to think these are isolated transactions, but are more likely part of a larger visionary master plan.”

Closely held Benckiser, run by former Reckitt Benckiser Group Chief Executive Officer Bart Becht, Monday offered $16 in cash per Caribou share, 30 percent above the last closing share price of $12.32.

Like Peet’s, Caribou will continue to operate under its own brand and management, the purchaser said.

The coffee market “is an attractive industry with favorable long-term fundamentals, which is why we are in it,” Tom Johnson, a U.S.-based spokesman for JAB, said by email. The stake in Master Blenders is a “pure financial investment and we do not control or input into their strategy.”

“JAB is very serious about consolidating the coffee industry,” said Marco Gulpers, an analyst at ING in Amsterdam.

The focus on coffee at JAB follows forays into personal care and luxury brands.

Its Coty Inc. unsuccessfully attempted a takeover this year of door-to-door cosmetics seller Avon Products Inc. for more than $10 billion.

Kraft never comments on the possibility of asset disposals, Chris McClement, senior marketing director for mainstream coffee, said by email.

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