Monday 1 October 2018 11:57 pm

Lavazza fills its cup with a multi-million pound coffee deal for Mars Drinks


Italian coffee maker Lavazza is set to buy the coffee arm of food giant Mars, Mars Drinks, in a deal potentially worth around $650m (£499m). 

The acquisition, expected to close in December, will see Lavazza take over Mars' tabletop Flavia machines and the Klix freestanding vending machine business.

Mars Drinks employs 900 people and turned over approximately $350 in 2017.

The family owned companies have not revealed the deal value, but source close to the situation told Reuters it was likely to land around $650m. 

The Mars coffee business stretches over North America, Germany, the UK, France, Canada and Japan, and helps Lavazza's strategy of international consolidation. 

The acquisition follows deals for French Carte Noire and ESP, Danish Merrild, Kicking Horse Coffee in Canada, NIMS in Italy and Australian Blue Pod Coffee.

The buyer said it will emphasise away-from-home coffee as it tries to grow Mars Drinks.

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 

“Today’s transaction with Mars, Incorporated is consistent with a common vision and shared values between two prominent family-owned companies who have a strong focus on delivering quality products with uncompromising commitment to our employees and associates, with a long-term vision.”