Lavazza acquires Mars Inc. coffee business for around $650mn

Italian coffee firm Lavazza Group has acquired Mars Inc.’s coffee business in an effort to expand its global footprint.

Through the deal, Lavazza will buy Mars Drinks, a business unit that includes Flavia and Klinx systems, two leading office coffee maker and vending machine brands.

The financial details were not disclosed, but sources close to the matter value the deal at approximately $650mn.

Lavazza Group CEO Antonio Baravalle said: “This acquisition fits perfectly within our international expansion strategy, the objective of strengthening key markets, as well as the pursuit of having an even closer relationship with end consumers.

"Indeed, this acquisition strengthens the Lavazza Group’s position in the OCS [office coffee service] and vending segments, which offer considerable opportunities for growth and development."

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Under the deal, Lavazza will acquire Mars Inc.'s coffee businesses in North America, Canada, Japan and Europe.

The transaction is expected to close by the end of the year.

Founded in 1895 by Luigi Lavazza, Lavazza is Italy’s largest coffee group by sales.

The acquisition comes amid a series of acquisitions in the global coffee sector. 

Last July, the Italian coffee maker acquired Australia’s Blue Pod Coffee Group.

In August, Coca-Cola acquired Britain’s largest coffee chain, Costa Coffee, from Whitbread for $5.1bn.

Nestlé also inked a $7bn licensing deal for Starbucks retail business earlier this year.