Daily Management Review

JAB coffee company buys Panera bakery for $ 7.5 billion


04/07/2017


The coffee company JAB Holding Co. agreed to buy the American network of bakeries Panera Bread Co. for $ 7.5 billion, the companies said in a joint statement. According to analysts, thus JAB plans to become a direct competitor to Starbucks, which previously also expressed interest in buying Panera and Dunking Brands Group.



Mike Mozart
Mike Mozart
Panera’s shareholders will receive $ 315 in cash for each share. April 6, the company's shares traded at $ 312.94. The deal, which could be closed as early as the third quarter of this year, implies that JAB will transfer its $ 340 million of debt to Panera.

JAB Holding Co. is a group of companies which shares do not circulate on stock exchanges. JAB specializes in long-term investments in premium brands of consumer goods, coffee, as well as in medical services. In particular, it owns the American manufacturer of coffee, tea, cocoa, coffee machines and components Keurig Green Mountain. In the US, the group owns a chain of Coffee & Bagels restaurants.

Experts say that purchase of Panera will expand possibilities of the conglomerate in the US and its audience. Panera has more than 2,000 bakery cafes in 48 US states and Canada. In recent years, the company has invested in development of delivery services and mobile order. The deal will be the largest of the four acquisitions of restaurants this year.

In January, Bob Evans Farms sold its chain of 522 family restaurants to a private investment company Golden Gate Capital for $ 565 million, including debt. In February, Restaurant Brands International, the parent company of the Burger King network, agreed to buy Popeyes Louisiana Kitchen Inc. for 1.8 billion dollars. In March, Darden Restaurants said it was buying Cheddar's Scratch Kitchen for $ 780 million. According to the TDn2K industry tracker, quoted by MarketWatch, the restaurant sector finished 2016 with the fourth quarter of sales decline. Last time it was in 2009, immediately after the financial crisis and beginning of the Great Recession.

Consumers are cutting costs and preferring to have their meals at home in order to save money. However, according to experts, the fast-food café sector demonstrates growth compared to full-service restaurants.

source: forbes.com






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