Panera Bread is reuniting with Au Bon Pain by buying the smaller bakery chain and naming a new CEO, major changes that come four months after Panera was acquired and taken private by investment firm JAB.
Au Bon Pain and Panera were part of the same company until 1999. Now Panera, which was sold to JAB for $7.2 billion in July, wants Au Bon Pain's business-driven locations to help drive its own business. It's the latest deal at JAB, which has been steadily growing an empire of coffee-and-bakery chains that by now also includes the likes of Krispy Kreme, Caribou Coffee, and Peet's.
Speculation had been growing recently that JAB might look to buy Dunkin' Donuts to keep adding to its coffee-driven lineup. Once news of the Au Bon Pain takeover was announced Wednesday afternoon, shares of Dunkin's parent, Dunkin' Brands, fell more than 4 percent.
Panera says it wants to use Boston-based Au Bon Pain and its 304 units to look for growth in different kinds of real estate than where Panera has traditionally been, including hospitals, universities, transportation centers and urban locations. Financial terms of the deal, set to close by the end of the year, weren't shared.
"Since Au Bon Pain typically is in smaller footprints, Panera Bread, on the whole, can better capture the needs of consumers who are on-the-go, rather than looking for a sit-down experience," said Marie Chan, a partner at Vivaldi, a brand strategy consulting firm.
A long history
Ron Shaich and his late partner Louis Kane formed Au Bon Pain Co. Inc. in 1981, and in 1993 Au Bon Pain acquired Saint Louis Bread Company. In 1999, the company was renamed Panera in Shaich's push for national growth, and that's when it sold off Au Bon Pain to focus solely on the future of Panera.