A massive breakfast empire is coming. Maybe. JAB Holding Company, the privately owned Luxembourg-based business that owns Krispy Kreme Doughnuts, Keurig Green Mountain, and Panera Bread may be aiming to acquire another big-name breakfast brand: Dunkin’ Donuts. The company formally known as Dunkin’ Brands Group Inc. has not officially made any announcements that they are open to a buyout. However, after rumors regarding the sale began circulating on Monday, shares of Dunkin’ jumped nearly 8 percent.
"JAB has been an aggressive acquirer over the past three years,” Jeremy Scott, a senior research analyst at Mizuho Securities, told CNBC. “[JAB pays] substantial premiums for coffee and bakery brands in both retail and restaurants." Scott is referencing JAB’s relatively recent acquisitions of Keurig Green Mountain, which sold for $13.9 billion in cash when the deal closed in 2016—now registering a transaction value of $14.1 billion according to Bloomberg; and Panera Bread, which sold for $7 billion (now with a transaction value of $7.5 billion) this past April. According to Bloomberg, if Dunkin’ were to sell now, the acquisition would have a transaction value of about $8.2 billion.
JAB also owns Caribou Coffee and bagel company Einstein Bros., as well as Peet’s Coffee, which umbrellas Stumptown Coffee Roasters, Intelligentsia, and Mighty Leaf. The company’s interest in Dunkin’ is another nod towards JAB’s interest in creating a consolidated coffee empire. Compared to their former interests in luxury brands like Jimmy Choo, Chloé, and Marc Jacobs, JAB’s transition to owning as many coffee and breakfast brands as possible could make a larger impact on the market.
Neil Saunders, managing director of GlobalData, told CNBC that acquiring Dunkin’ would give JAB “an enviable position” in the coffee and breakfast sphere. The deal could also put them in the position of competing with Starbucks, the current industry leader when it comes to coffee.
Dunkin’ has recently made moves to streamline their business plan, the most recent change being their decision to reduce their doughnut menu in certain locations from 30 to 18 varieties. While the president of Dunkin’ Donuts US and Canada David Hoffmann cited such changes as an effort to enhance the company’s “beverage-led, on-the-go,” makeup, there is a chance the new efficiencies may be intended to make Dunkin’ more attractive to buyers.
At this stage, neither Dunkin nor JAB have commented on the potential buyout.