What does the De'Longhi coffee machines deal mean for cafes?
The De'Longhi Group announced it will merge Italian espresso machine brand La Marzocco with Swiss fully automatic manufacturer Eversys into a new business group for coffee machine research, development, and sales. De'Longhi is paying about US$374 million for La Marzocco shares and, through De'Longhi Industrial, will indirectly hold a 62.6 percent stake, making it the largest shareholder.
Both brands will keep independent operations, their existing management teams, and their own corporate cultures. The new entity will have a separate board reporting directly to the De'Longhi CEO, and the deal is expected to close before the end of the current fiscal quarter. The move reshapes the high-end segment, where La Marzocco, sometimes called the most expensive coffee machine in the world by reputation, and Eversys are major players.
A major shake-up is coming to the coffee machine world. The De'Longhi Group has announced that it will merge the high-end Italian espresso machine brand La Marzocco with the Swiss fully automatic coffee machine manufacturer Eversys to form a new business group focused on the R&D and sales of coffee machines. De'Longhi is paying about US$374 million to acquire La Marzocco shares and, through De'Longhi Industrial, will indirectly hold a 62.6% stake, making it the largest shareholder. The two brands will retain independent operations and their existing management teams, and the new group will have an independent board of directors reporting directly to the De'Longhi CEO. How will this integration affect the high-end coffee machine market landscape? What does it mean for coffee enthusiasts and cafe operators? This article will sort through the details of the deal, the brands' backgrounds, and the outlook ahead.
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For coffee enthusiasts, the two names in the title are probably both familiar: one is a well-known face in the home coffee machine market, while the other has been dubbed the Rolls-Royce of the coffee machine world, often called "La Ma" by those in the industry. These two brands are almost unmatched in industry recognition.
According to Daily Coffee News, the De'Longhi Group recently announced that the Italian espresso machine giant La Marzocco and the Swiss coffee machine manufacturer Eversys will be integrated into a new business group focused on the R&D and sales of coffee machines.
The deal was officially disclosed to the public at the end of last month and is expected to be completed before the end of the current fiscal quarter, at which point a new entity owned by Italian De'Longhi SpA (a company under the De'Longhi Group) will be created.
The De'Longhi Group said that after the merger an independent board of directors will be established, reporting directly to the De'Longhi CEO. The purpose of the new group is to create more room for synergy and joint sales for the La Marzocco and Eversys brands. As for management, De'Longhi added that the two will continue to operate independently, led directly by their existing management, in order to preserve their respective corporate cultures.
The De'Longhi Group is a century-old Italian company founded by the De'Longhi family in 1902 and has now passed the hundred-year mark. The group currently has four major brands: De'Longhi, Kenwood, Braun, and Ariete, among which De'Longhi is the best known in the coffee machine segment.
Public information shows that Eversys was founded in Switzerland in 2009 and is known for producing high-quality, high-performance fully automatic coffee machines that are easy to operate and maintain. The De'Longhi Group bought a 40% stake in Eversys as early as 2017, then completed a full acquisition in March 2021, achieving 100% ownership.
On the other hand, this collaboration also injects a considerable amount of capital into the operations of the high-end Italian espresso machine maker La Marzocco. La Marzocco was born in Florence, Italy, in 1927 and has accumulated nearly a century of experience in coffee equipment manufacturing.
In 2021, De'Longhi issued a statement refuting Italian media reports that the group would take a stake in La Marzocco. Now, the De'Longhi Group has become La Marzocco's largest shareholder. In the new deal, De'Longhi will pay about US$374 million to acquire La Marzocco and other shares.
De'Longhi wrote in the announcement: "From the date of approval of the transaction, De'Longhi SpA is controlled by De'Longhi Industrial, which holds 53.59% of the total shares of the De'Longhi Group." On the investor side, it said De'Longhi Industrial, through its subsidiaries, holds a combined 62.6% stake in La Marzocco, thereby indirectly leading control over La Marzocco.
At the end of the report, it was mentioned that the De'Longhi Group expects La Marzocco to achieve revenue of 204 million euros (about US$262 million) in the 2023 fiscal year, while Eversys is expected to bring in 132 million euros (about US$144 million).
Image credit: Daily Coffee News Staff
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