(Adds background, analyst comment, advisors)
May 7 (Reuters) - Mondelez International Inc and rival D.E Master Blenders 1753, who make Kenco and Douwe Egberts brands respectively, will join up in a deal that creates the world's biggest pure-play coffee company to take on market leader Nestle.
The deal announced on Wednesday brings together Mondelez brands like Carte Noire and Gevalia with D.E Master Blenders' L'OR, Pilão and Senseo. It will be run by the current management of D.E Master Blenders and will allow Mondelez to focus on its snacks business, which includes Cadbury chocolate and Oreo cookies.
Mondelez also announced a $3.5 billion restructuring program aimed at cutting costs and boosting margins, addressing the main complaint of activist investor Nelson Peltz, who was recently named to the Mondelez board.
Mondelez, whose shares rose 8 percent in early trade in New York, said it would receive about $5 billion and a 49 percent stake in the new company, to be called Jacobs Douwe Egberts.
With annual revenue of more than $7 billion, it will be the world's No. 1 pure play coffee company, though still significantly smaller than the coffee business owned by world leader Nestle.
Wells Fargo called the deal an "outstanding strategic decision".
"We've long highlighted coffee as an under-appreciated long-term growth driver for Mondelez and by combining assets with D.E Master Blenders, we see higher-probability scenario of creating long-term shareholder value," they said in a research note.
The move is the latest by D.E Master Blenders owner Joh A. Benckiser (JAB) to be a global coffee player.
The holding company controlled by Germany's billionaire Reimann family bought the owner of Douwe Egberts coffee last year in a 7.5 billion euro deal and bought U.S. coffee chains Caribou Coffee and Peet's Coffee & Tea in 2012 for $340 million and $1 billion, respectively.
Those chains, which compete with Starbucks and Dunkin Brands Group, are not part of the new company. Neither is Mondelez's coffee business in France though JAB has made a binding offer for that business.
Mondelez also reported a first-quarter adjusted profit of 39 cents per share, which was higher than the 35 cents per share analysts were expecting, according to Thomson Reuters I/B/E/S.
Quarterly net revenue fell 1.2 percent to $8.64 billion, in line with the average estimate. Organic net revenue, which strips out acquisitions and other items, rose 2.8 percent.
D.E Master Blenders was advised by Lazard, BDT, Goldman Sachs and JP Morgan while JAB was advised by Bank of America and Morgan Stanley. Mondelez was advised by Centerview Partners and Perella Weinberg Partners.
(Reporting by Martinne Geller in London and Siddharth Cavale and Maria Ajit Thomas in Bangalore; Editing by Ted Kerr and William Hardy)