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GERMAN investment firm Joh A Benckiser (JAB) is to buy the company behind Douwe Egberts coffee for €7.5bn (US$9.8bn), as it looks to create a hot drinks empire capable of challenging Nestlé.

The company says that D E Master Blenders (DEMB) – which also makes Senseo coffee and Pickwick Tea as well as Douwe Egberts – will be “an ideal platform” for growing its tea and coffee business. Over the past few years JAB has acquired several companies in the sector, including the US’ Peet’s and Caribou Coffee, and DEMB gives it a firm foothold in Europe.

JAB chair Bart Becht says that he believes DEMB has “a very strong management team, fantastic brands and enormous expertise and potential in the coffee and tea categories.”

He adds that as a matter of policy, the company “doesn’t involve itself” in running the operations in its companies, and has committed to keeping DEMB’s HQ, R&D and production facilities in the Netherlands. Becht also told reporters that the company has no plans to merge its latest acquisition with its existing businesses in the US.

DEMB is the one of the world’s biggest producers of tea and coffee, with only Nestlé and Monzelez International having larger sales.

“JAB’s intended offer is testimony to the strength of DEMB’s brands, their leading market positions and the promising strategy and innovation pipeline the company has developed,” claims DEMB interim CEO Jan Bennink, who has been filling the position since previous CEO Michael Herkemij quit late last year. “Within the proposed new ownership structure, DEMB will be central to the creation of one of the world’s leading coffee and tea companies.”