Looking to grow its presence in the tea sector, global coffee giant Starbucks Coffee Co. has agreed to acquire Atlanta-based Teavana Holdings Inc. for $620 million in cash.
The retail tea chain operates 300 stores primarily in U.S. shopping malls but has recently expanded abroad by acquiring a Canadian chain and opening its first store in the Middle East with the help of a Starbucks joint venture partner.
Starbucks plans to leverage its strengths in retail operations and loyalty programs with Teavana’s sourcing capabilities and expertise in the sector. While maintaining the mall stores, it also plans to introduce neighborhood Teavana stores domestically and abroad.
Coupled with the company’s existing Tazo brand, adding Teavana will give the company a “two-tiered” presence in a sector worth $40 billion globally, executives said.
In September, Teavana released its second quarter results for 2012 showing a rise in sales of 38 percent to $43.1 million in comparison to the same period last year when it posted sales of $31.1 million.
The first Teavana opened at Atlanta’s Lenox Square Mall in 1997.
The deal is expected to close in 2013.