American food and beverage conglomerate Mondelez International and Dutch firm D.E Master Blenders 1753 have entered into an agreement to form a joint venture (JV) by combining their coffee businesses.

To be named Jacobs Douwe Egberts, the new JV will create over $7bn in annual revenues when formed.

As per the agreed terms, Mondelez’s wholly-owned coffee portfolio outside of France will be combined with D.E Master Blenders 1753.

To receive Mondelez International’s coffee business in France, D.E Master Blenders’ owner Acorn Holdings has made a binding offer.

The transactions are subject to regulatory approvals and are expected to be completed in 2015.

Mondelez will receive around $5bn in cash and a 49% stake in Jacobs Douwe Egberts, following the completion of the transactions.

Acorn Holdings will own a majority stake in the proposed combined company.

Mondelez International chairman and CEO Irene Rosenfeld said that the company is delighted with this transaction and the substantial value it expects to create for its shareholders.

"By retaining a significant stake in the combined company, we’ll continue to benefit from the future growth of the coffee category and share in the synergies and tremendous upside of this leading, one-of-a-kind coffee company," added Rosenfeld.

Mondelez’s coffee brands including Jacobs, Carte Noire, Gevalia, Kenco, Tassimo and Millicano will complement D.E Master’s Douwe Egberts, L’OR, Pilao and Senseo brands.

Image: Mondelez International Headquarters, Three Parkway North Deerfield, Illinois. Photo: Courtesy of Mike Mitchell.