Germany's billionaire Reimann family's Joh A Benckiser SE, the owner of Coty Inc, the world's largest fragrance company, today agreed to acquire Peet's Coffee & Tea Inc, for about $1 billion.

The deal comes two months after Paris and New York City-based Coty withdrew its unsolicited takeover offer for Avon Products Inc, ending a 10-week struggle by the over a century-old fragrance manufacturer to buy the world's largest cosmetics direct seller, despite having sweetened its offer to $10.7 billion. (See: Coty withdraws $10.7-bn Avon bid)

Joh A Benckiser, the investment vehicle for the Reimann family, which also owns stake in household products maker Reckitt Benckiser Plc, will pay $73.50 per share in cash, representing a premium of nearly 29 per cent over Peet's 20 July closing price of $57.16.

Chicago-based merchant bank BDT Capital is an advisor in the Peet's deal and is also taking up a minority stake.

Founded in 1966 by Dutch immigrant Alfred Peet as a single store called Peet's Coffee, Tea & Spices in Berkeley, California, Peet introduced darker roasted arabica coffee, such as french roast and coffee beans to make espresso drinks in the Bay Area of San Francisco and to the US coffee retailers.

The founders of Seattle, Washington-based Starbucks coffee house used to buy their coffee beans from Peet's during their first year of business in 1971.

Peet sold his business in 1979 to Sal Bonavita, who in turn sold it to Jerry Baldwin, a co-founder of Starbucks, and others in 1984. Peet's went public in 2001.

Peet has a majority of its around 190 specialty stores in California, as well as in Colorado, Illinois, Massachusetts, Oregon and Washington. Its coffee is also sold in thousands of grocery stores across the US.

It had net income of $17.8 million on revenues of $371.9 million in 2011.

"We are very excited about this next chapter in Peet's rich history," said Patrick O'Dea, president and CEO of Peet's. "Over many years we've demonstrated an unyielding commitment to craft coffees and teas of uncompromised quality. This commitment is what has distinguished the Peet's brand among all others and will continue to guide us as we go forward."

"At JAB, we are committed to owning and investing in companies with strong, premier-quality brands and great people whose values we share," said Bart Becht, chairman of JAB. "Peet's is just such a company and we look forward to preserving the company's culture and core values, while supporting management's vision for future growth."

The Peet deal comes less than a month after Joh A Benckiser revealed that it had acquired a 12.2-per cent stake in Dutch maker of Pickwick tea and Senseo single-serve coffee pads D.E Master Blenders 1753 NV and might increase its stake in the future.

Post closing, Peet will be privately owned and will continue to be operated by the company's current management team and employees with its headquarter remaining in Emeryville, California.

Apart from Coty and stake in Reckitt Benckiser, Vienna-based Joh A Benckiser also owns Labelux, a luxury goods company with brands such as Jimmy Choo, Bally and Belstaff.