Will Nespresso’s settlement cause other prospective buyers of Mondelez’s coffee business to perk up?

Nespresso has worked hard since its creation to maintain an air of exclusivity around its brand and products. This has included limiting its sales channels to either high end retailers or exclusive Nespresso boutiques and recruiting George Clooney, voted one of the top 50 sexiest stars of all time, as well as one of the World’s most influential people. And finally by regularly changing the compatibility between machines and capsules in order to prevent competitors’ capsules from being used by savvy customers looking for a slightly cheaper alternative.

However, France’s competition regulator yesterday changed the game for rivals like Mondelez International and Ethical Coffee Co, which had previously been able to supply their own compatible capsules as Nespresso patents had begun to expire. Historically Nespresso would deal with these competitive threats by changing their machines, thus rendering their rivals’ capsules unusable.

However Nestle, the Swiss company behind Nespresso, has now agreed with the French regulator that they will inform their competitors of forthcoming changes to their machines and provide prototypes in order for their rivals to ensure compatability with their capsules.

This makes Mondelez’s agreed sale of its coffee business to DE Master Blenders more interesting. The new agreement undoubtedly strengthens the vendor’s position going into the deal and could be a factor which ultimately influences the transaction’s value if Mondelez opts to hold out for a higher bid. By the same token, it would not be surprising if the news piques the attention of more interested parties who could decide to submit competing bids themselves.