Sara Lee pays Philips $222 million for partnership in Senseo coffee systems

Sara Lee Corp. announced on 26 January it agreed to enter into a nine-year exclusive partnership with Philips on Philips-branded consumer coffee systems. Sara Lee and Philips currently co-own the brand, with each company having a 50 per cent stake. Under the terms of the agreement, Sara Lee will pay Philips a total amount of €170 million (US$222.85 million). Sara Lee and Philips have been working together on Senseo since 2001, with Sara Lee producing the coffee pods and Philips designing, manufacturing and distributing the single-serve machines. In a press release, Sara Lee noted that together, the two companies have built Senseo into one of the leading single-serve coffee systems, with over 33 million appliances sold worldwide. Upon closing, Sara Lee will have full control of the Senseo trademark, and is expected to expand into new coffee segments and markets. Philips will continue to design, manufacture and distribute all Senseo machines over the next nine years as the brand builds on its leadership position.

“This acquisition and partnership allow us to strengthen our relationship with Philips to focus on innovation in coffee technology and aggressively push geographical expansion,” says Jan Bennink, Executive Chairman of the board, Sara Lee Corp. “Philips‟ long history of innovation, combined with superior retail strength in our key markets, makes it the perfect partner to work with as we take Senseo to the next level.” “Owning 100 per cent of Senseo, our most global coffee brand, is a major step for CoffeeCo as we prepare for our upcoming spin-off into a separate, publicly-traded company,” says Michiel Herkemij, Chief Executive Officer, Sara Lee Coffee and Tea. “With increased innovation, we believe this move will enable us to build on our leading position and further position Senseo as a global power brand in the coffee segment.” “With Senseo, Philips and Sara Lee pioneered the market for portioned coffee solutions, revolutionising the consumption of high-quality coffee in the home,” says Pieter Nota, Chief Executive Officer of Philips Consumer Lifestyle. “Over 33 million Senseo appliances have been sold since its launch in 2001, and with today‟s agreement we‟re setting the stage for future success.”

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