IPO gives JDE Peet's 2bn in struggle with Nestlé

As of today, JDE Peet’s, the parent company of Douwe Egberts and Senseo, is listed on the stock market. The company has raised 2.25 billion euros already, making it the largest IPO of the year.

Sooner than expected

At the start on Friday morning, more than 22 million new shares were sold at 31.50 euros. Moreover, former shareholders Acorn Holdings and Mondelez sold 39.5 million and 9.7 million of their shares respectively, thus generating a total of 2.25 billion euros. Moreover, in the first few hours after the IPO, the share price already increased by 10 %.

Initially, the coffee company was not expected to go public until the end of next week, but the order book filled up so quickly that the deal was brought forward, Reuters reports. The parent company of Douwe Egberts managed to complete in about ten days a process that normally takes several weeks. Still, the company feared that the coronavirus crisis and the ensuing market volatility could lead to difficulties.

Fight Nestlé

JDE Peet’s was created at the end of last year through the merger between American Peet’s Coffee and Jacobs Douwe Egberts, precisely in view of an IPO. With the proceeds, the world’s second-largest coffee player wants to reduce its debt burden and respond to growing competition from its rival Nestlé. The Nespresso producer holds a quarter of the market, compared to 10 % for JDE Peet’s. 

Last year, Nestlé even managed to take the lead on the Belgian market for the first time, while sales of filter coffee and Senseo pads were declining. How times have changed: in the mid-19th century, Douwe Egberts accounted for more than half of the Netherlands’ coffee and tobacco exports, according to Belgian newspaper De Tijd. Today, the coffee giant has an annual turnover of seven billion euros and is active in more than 140 countries. In 2012, the owner of the company at the time, Sara Lee, had floated Douwe Egberts on the stock exchange, but the brand was soon taken over by JAB Holdings.