Starbucks Buys Teavana for $620 Million

Seattle-based Starbucks Coffee Co. is expanding its brand offering again, this time entering into a merger agreement with Teavana Holdings Inc. (Atlanta) to acquire Teavana for an aggregate acquisition price of approximately $620 million in cash.

The merger will result in Teavana becoming a wholly-owned subsidiary of Starbucks. The specialty retailer offers more than 100 varieties of premium loose-leaf teas, authentic artisanal teawares and other tea-related merchandise. Starbucks says it plans to continue to grow and extend Teavana’s 300 mall-based stores as well as add a high-profile neighborhood store concept to accelerate Teavana’s domestic and global footprint.

“We believe the tea category is ripe for reinvention and rapid growth,” says Howard Schultz, Starbucks chairman, president and ceo. “The Teavana acquisition now positions us to disrupt and lead, just as we did with espresso starting three decades ago.

“This complements our existing Tazo brand and gives us the unique opportunity to create a two-tiered market position,” Schultz adds.

Teavana recently opened its first store in the Middle East in partnership with Starbucks’ existing joint-venture partner Alshaya and has plans to enter new, high-consumption tea markets around the world in the years ahead.