Dutch tea and coffee giant, Jacobs Douwe Egberts (JDE) has put up a RM1.47 billion (US$373 million) offer to acquire Malaysian coffee company, OldTown.
OldTown White Coffee has 232 outlets, including 189 stores in Malaysia and 9 in Singapore. The others are spread across Indonesia, Australia, China, Hong Kong and Myanmar.
JDE plans to delist the firm and take it private. OldTown shareholders who account for 51.45% of the company have agreed to accept the offer. They include Mawer Investment Management, which holds a 7.5% as OldTown's biggest institutional investor, as well as OldTown Group Managing Director and founding shareholder Lee Siew Heng, who has a 1.3% stake.
The acquisition will be JDE's second such deal in Asia in recent years, following its S$1.45 billion (US$1.1 billion) buyout of Singapore-based Super Group and its famed 3-in-1 coffee mixes.
JDE brands include Jacobs, Tassimo, Douwe Egberts and Kenco, and it is part of European investment firm JAB Holding Company, which has built up a global coffee business through a string of deals over the past few years.
JDE Chief Financial Officer Fabien Simon said that OldTown has developed an impressive footprint of fast-moving consumer goods and food and beverage business across the Asia-Pacific region. “We see huge potential in the business," Simon said, adding that the group will work with OldTown to rapidly grow the operations as part of the broader JDE platform.
Lee said the acquisition will help take the company to the next level to "accelerate the creation of more shareholder value".
In a related development, OldTown Bhd has also announced its plan to expand its store to Cambodia. OldTown said its wholly-owned subsidiary, Kopitiam Asia Pacific Sdn Bhd has entered into a master licence agreement with Cambodia-based Biniton Food & Beverage Co Ltd and its chairman Bun Khang granting them the exclusive right to operate the restaurant business there.
The main business of Biniton includes the retail sales of food, beverages and tobacco in specialised stores. OldTown said the term of the agreement is 5 years with effect from 14 December with an option to renew for two consecutive terms of 5 years each. Under the deal, Biniton and Bun are scheduled to open its first Cambodia outlet by the 2nd quarter of 2018.