German investor Joh A Benckiser is to buy the owner of Douwe Egberts coffee in €7.5 billion deal to boost its position in a hot drinks industry driven by innovation and emerging market growth.

DE Master Blenders 1753 is the Dutch owner of Douwe Egberts coffee and Pickwick tea.

It said today it had reached conditional agreement on a €12.50 per share cash takeover offer from a group of investors led by JAB.

JAB, the investment vehicle of the billionaire Reimann family, wants to create a global coffee brand on a par with global leader Nestle.

It has already built up a portfolio of coffee brands including Caribou Coffee and Peet's Coffee & Tea in the US, and wants to buy DEMaster Blenders, which has a strong position in Europe.

The offer is below JAB's original bid proposal of €12.75 per share, but above DEMaster Blenders' closing share price of €12.23 yesterday.

"DE Master Blenders has a very strong management team, fantastic brands and enormous expertise and potential in the coffee and tea categories," Bart Becht, Chairman of Joh A. Benckiser, said.

He said the company intends to use it as a platform for ''both organic growth as well as acquisitions in the fast moving consumer goods coffee and tea categories."