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Investment giant and global coffee player JAB Holdings has announced it is exploring a multibillion euro float of its Jacobs Douwe Egberts and Peet’s Coffee brands.

The company, which has grown into the world’s second-largest coffee retailer and roaster, has merged Jacobs Douwe Egberts and Peet’s ahead of a float to create “a global leader in PURE play FMCG coffee with leading positions in more than 20 major markets”.

Depending on market conditions, the IPO is expected to be completed sometime during 2020, after which JAB expects to remain the controlling shareholder.

It is thought JAB is eyeing Amsterdam as a possible listing destination, given JAB’s strong roots in the Netherlands.

The Financial Times suggested the float could value the business at around €3bn.

JAB said the newly merged JDE Peet’s will house its brands including as Peet’s Coffee, the founder of specialty coffee and leading super premium brand in the United States, as well as global brands, including L’OR, Jacobs Coffee, Douwe Egberts, Senseo, Tassimo, Moccona, Kenco, Pickwick and Pilão.

Its portfolio will include traditional roast and ground coffees, soluble coffee, on demand systems with innovative proprietary platforms such as Senseo and Tassimo, and products compatible with other popular coffee systems.

JDE Peet’s will be present in more than 140 countries and have revenues of approximately €7 billion, benefiting from the high growth of the coffee category in both developing and developed markets.

JAB said the exploration of an IPO is a “key milestone” in the partnership between Acorn Holdings (which includes controlling shareholder JAB and BDT Capital) and Mondelez International.

As part of preparing for the IPO, Peet’s Coffee CEO Casey Keller will become CEO of JDE Peet’s, effective January 2020.

Frederic Larmuseau, who has decided to step down from his role as CEO of JDE, will remain at JDE as a special advisor to the Board and the CEO.

Olivier Goudet, Chairman of JDE and Chairman of Peet’s Coffee, said, “We are excited that Casey will assume the role as CEO of JDE Peet’s as we continue further building upon the company’s strong track record of growth and expansion.

“We are proud of what we have accomplished at JDE and Peet’s but believe with our IPO the best years of growth and shareholder value creation are ahead of us with our newly combined company. I want to thank Frederic for his stewardship in driving JDE’s growth and development.”

Casey Keller commented, “JDE Peet’s is an exceptional business with some of the most beloved coffee brands in the world, and I am excited to lead the company in its next phase of growth. With our leading positions in many important markets, supported by all the great people in our organization, we are well-positioned to continue achieving strong long-term growth”.

Keller has been the CEO of Peet’s Coffee since 2018, after 25 years of leadership roles in the global fmcg industry including at P&G, Heinz, Mars Wrigley, and Alberto Culver.

Morning update

On the markets this morning, the FTSE 100 has edged up another 0.1% to 7,533.7pts.

Early risers include DS Smith (SMDS), up 1.3% to 392.9p, Compass Group (CPG), up 1.2% to 1,891p and Coca-Cola HBC (CCH), up 1% to 2,553p.

Fallers so far today include Hilton Food Group (HFG), down 2.7% to 1,026p, Ocado (OCDO), down 1.5% to 1,219.5p, PayPoint, down 1.4% to 1,000p and FeverTree (FEVR), down 1.3% to 2,000p.

Yesterday in the City

The FTSE 100 maintained its recent gains yesterday, rising 0.1% to 7,525.2pts.

However, the pound was hit by renewed fears over a no deal Brexit as reports suggested Boris Johnson is to scrap the possibility of a Brexit extension at the end of 2020. The pound fell back to $1.31 having jumped to $1.35 in the immediate aftermath of the general election result.

Unilever (ULVR) sank 7.2% yesterday back to 4,299p after it announced its 2019 organic sales growth would be below expectations because of tough market conditions in key juristictions.

A number of consumer stocks were hit by increased worries over the impact on consumer sentiment of more Brexit uncertainty.

PZ Cussons (PZC), dropped 7.9% to 178.8p, FeverTree (FEVR) fell 4.6% to 2,027p, Greencore (GNC) fell 4.4% to 269.4p, Marks & Spencer (MKS) dropped 4.3% to 219p, McBride (MCB) was down 2.8% to 82p and B&M European Value Retail (BME) fell 2.7% to 409.5p.

Some FTSE 100 names were hit despite the fall in the pound, including Reckitt Benckiser (RB), down 2.5% to 6,021p, Associated British Foods (ABF), down 2.4% to 2,567p and Tesco, down 2.2% to 253.3p.

Risers yesterday included Glanbia (GLB), up 3.1% to €10.08, Premier Foods (PFD), up 2.2% to 38p, Finsbury Food Group (FIF), up 1.7% to 90p, PayPoint, up 1.4% to 1,014p, Diageo (DGE), up 1.3% to 3,155p and Just Eat (JE), up 1.3% to 800p.