Lavazza bids for two French coffee brands

Italy’s Lavazza has made a binding offer of more than 600 million euros ($708 million) for two French coffee brands as it seeks to bolster revenues outside its domestic market, sources close to the situation said on Thursday.

Lavazza said in a statement it was confident it would complete the acquisition this year, without giving financial details.

The two brands, L’Or and Grand Mere, were put up for sale to ease a merger of Mondelez International’s (MDLZ.O) coffee business with D.E. Master Blenders 1753. Mondelez is selling Grand Mere, while D.E. Master Blenders is selling L’Or.

Lavazza, the world’s No. 7 coffee maker, hired advisers for the potential deal in October.

Israel’s Strauss Group (STRS.TA) and four private equity firms also presented offers for the French brands, but Lavazza is now the only bidder left, one of the sources said.

Earlier this year, the chief executive of Lavazza told Reuters the company wanted to raise its non-Italian revenues to 70 percent from 46 percent at present, adding the company had the resources to fund its expansion.

“The company had more than 400 million euros in cash at the end of 2014,” the source said.

The transaction needs to be approved by the European Commission and by the unions of the French companies involved.

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