Starbucks Corp. announced last week that it will buy Atlanta-based Teavana Holdings Inc. (NYSE: TEA) for $620 million.
The announcement came two hours after Atlanta Business Chronicle first reported the deal was expected.
The all-cash deal, expected to be completed this year, would bring Starbucks (NASDAQ: SBUX) into the $40 billion global tea market, giving the global coffee brand more than 300 retail outlets.
Starbucks plans to continue to grow and extend Teavana’s mall-based stores and add a high-profile neighborhood store concept that will accelerate Teavana’s domestic and global footprint, the company said.
“We believe the tea category is ripe for reinvention and rapid growth,” said Howard Schultz, Starbucks CEO, in a statement. “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.”