(Reuters) - Peet's Coffee & Tea Inc (>> Peet's Coffee & Tea, Inc.) said on Monday it struck a deal to be acquired by Joh. A. Benckiser for about $1 billion, a move that will give Peet's a financial jolt as it competes against larger coffee and tea shops and will broaden the reach of Germany's Reimann family in the coffee business.

The offer price of $73.50 per share in cash represents a premium of nearly 29 percent over Peet's July 20 closing stock price of $57.16.

Shares of Peet's were trading at $73.70, above the offer price, after soaring to $74.25 in morning trading on Nasdaq.

Peet's, a specialty coffee and tea company, was founded in 1966 and competes with chains such as Starbucks Corp (>> Starbucks Corporation), the Seattle-based coffee behemoth that owned Peet's for a few years in the 1980s.

Joh. A. Benckiser, the investment vehicle for the Reimann family of Germany, owns stakes in companies such as household products maker Reckitt Benckiser Plc (>> Reckitt Benckiser Group Plc) and fragrance and cosmetics company Coty Inc.

Benckiser expressed a strong taste for the coffee business earlier this month when it said it might increase its minority stake in D E Master Blenders 1753 NV (>> DE MASTER BLENDERS), the Douwe Egberts coffee business spun out of Sara Lee and listed in Amsterdam.

Along with Benckiser, BDT Capital is participating in the Peet's deal as an adviser and minority investor. Chicago-based BDT was founded by Byron Trott, a long-time confidant of billionaire investor Warren Buffett.

The deal is expected to close in about three months and is not subject to a financing condition, the parties said.

Once it is completed, Peet's will be privately-held and will still be run by its current management team. It will remain based in the San Francisco Bay Area, with its headquarters in Emeryville, California.

STARTED IN 1966

Peet's was started by Dutch immigrant Alfred Peet in 1966.

According to the company, Peet trained the founders of Starbucks and supplied that company's first store with Peet's fresh-roasted coffee beans in 1971.

Peet retired in 1983. A year later, Starbucks bought Peet's and its four stores in the San Francisco Bay Area.

In 1987 Jerry Baldwin, a Starbucks co-founder, and others sold that company, and Baldwin stayed with Peet's. He has been on the Peet's board since 1971. He was the company's CEO from 1971 to 1994 and its chairman from 1994 to 2001.

Peet's went public in 2001 and has the bulk of its stores in California, along with locations in Colorado, Illinois, Massachusetts, Oregon and Washington. Its coffee is also sold in thousands of grocery stores.

Citigroup is serving as Peet's exclusive financial adviser on the deal and delivered a fairness opinion to the company's board. Cooley LLP is acting as Peet's legal adviser.

Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal adviser to Joh. A. Benckiser. Morgan Stanley & Co LLC and BDT & Co. are serving as its financial advisers.

(Reporting by Jessica Wohl in Chicago, additional reporting by David Jones in London; Editing by Gerald E. McCormick)