Business

Krispy Kreme owner pays $7.5bn for Panera Bread chain

People walk past Panera Bread branch Image copyright Getty Images

The owner of Krispy Kreme Doughnuts and Kenco coffee will pay $7.5bn (£6bn) to take control of US bakery and sandwich chain Panera Bread.

JAB Holdings also controls coffee brands Douwe Egberts and Peet's, as well as the luxury shoe maker Jimmy Choo and beauty firm Coty.

The acquisition is the biggest US restaurant deal, according to S&P Global Market Intelligence.

Shares in Panera closed more than 14% higher following the announcement.

JAB, a Luxembourg-based investment firm, is owned by the billionaire Reimann family, which paid $1.35bn for Krispy Kreme last year.

Panera's origins began 36 years ago, under the Au Bon Pain name, with one outlet in Boston.

In 1993 the company bought Saint Louis Bread Company which had 20 branches at the time. Four years later it changed the chain's name to to Panera Bread.

In 1999 it sold all its other businesses, including Au Bon Pain, to concentrate investment on Panera.

Panera now has more than 2,000 restaurants across the US. It employs about 100,000 people and has annual sales of $5bn.

The chain focuses on healthier, additive-free foods.

Founder and chairman Ron Shaich said: "Panera has been the best-performing restaurant stock of the past 20 years - up over 8,000%. Today's transaction is a direct reflection of those efforts and delivers substantial additional value for our shareholders."

JAB will also take on about $340m of Panera's debt, the companies said.

It is paying 41 times earnings to take control of Panera - a very hefty premium the level of which is more common in the technology sector.

Olivier Goudet, chief executive of JAB, said: "We have long admired Ron and the incredible success story he has created at Panera. We strongly support Panera's vision for the future, strategic initiatives, culture of innovation, and balanced company versus franchise store mix."

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