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Panera To Buy Au Bon Pain, Extending Takeover Spree For JAB

Published on Nov 9 2017 9:18 AM in Retail tagged: Panera / Au Bon Pain / JAB

Panera To Buy Au Bon Pain, Extending Takeover Spree For JAB

JAB Holding Co., the investment firm backed by Austria’s billionaire Reimann family, is expanding its U.S. food empire.

The firm’s Panera Bread business has agreed to acquire the Au Bon Pain bakery chain, adding about 200 U.S. cafes -- and another 100 abroad -- to a sprawling portfolio that includes coffee, doughnuts and bagels. Terms of the transaction, which unites restaurant brands that were part of the same company until the late 1990s, weren’t disclosed.

The purchase comes a few months after JAB bought Panera in a $7.2 billion takeover, thrusting the firm into the fast-casual restaurant market. That acquisition brought more than 2,000 cafes that are popular with the lunch crowd. Au Bon Pain will bring restaurants that also emphasize bread and pastries, with locations in places like hospitals, colleges and train stations.

“They want to be dominant in coffee and restaurants that sell coffee,” said Michael Halen, an analyst at Bloomberg Intelligence. “They’ve been very aggressive over the last few years.”

Dunkin' Brands

The move disappointed investors in Dunkin’ Brands Group Inc., which has been cited as a potential takeover target for JAB. The investment firm has previously scooped up Keurig Green Mountain, Krispy Kreme, Caribou Coffee, the Einstein Noah Restaurant Group, Peet’s Coffee & Tea and Stumptown Coffee Roasters -- a buying frenzy that has jolted the food industry.

Adding Dunkin’ Donuts would give JAB a hard-to-match assortment of coffee and breakfast brands -- bringing heavier competition to Starbucks Corp., the world’s largest chain of cafes. With that possibility looking more remote, Dunkin’ shares fell as much as 4.7 percent to $55.75. That marked the biggest intraday drop in more than a year.

The latest deal also reconnects Panera Chief Executive Officer Ron Shaich with his old business. He and the late Louis Kane started Au Bon Pain in 1981. The company went on to acquire Saint Louis Bread Co., which was later renamed Panera. The Au Bon Pain brand was sold off in 1999.

CEO Leaving

The reunion will serve as a swan song for Shaich, who is stepping down as Panera’s CEO on Jan. 1 -- a move the company announced shortly after news of the deal hit. His deputy, Blaine Hurst, will take the reins, with Shaich remaining chairman.

Au Bon Pain, meanwhile, has struggled to maintain growth. In 2016, the Boston-based chain’s sales slipped 3.2 percent to about $352 million, according to Technomic, a restaurant research firm.

JAB began building its caffeine-focused empire with the 2012 purchase of a stake in Amsterdam-based D.E Master Blenders 1753 NV, the maker of Senseo and Douwe Egberts brands. In the U.S., JAB has developed a portfolio of co-branded restaurants called Coffee & Bagels, which offer Caribou java and Einstein Bros. bagels.

Four Reimann siblings -- Renate Reimann-Haas, Matthias Reimann-Andersen, Stefan Reimann-Andersen and Wolfgang Reimann -- have a combined net worth of $11.6 billion, according to the Bloomberg Billionaires Index.

JAB also controls cosmetics maker Coty Inc., which announced an agreement this week to license Burberry Group Plc’s beauty brands.

News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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