Starbucks Corp. (Nasdaq; SBUX) has agreed to sell the Tazo tea brand to Unilever plc for $384 million. The sale will give the coffee chain conglomerate an opportunity to focus on its Teavana business.
“We continue to see significant growth in our tea business through our Teavana brand, and this transition supports our strategy to elevate the premium tea experience for our customers," says Starbucks CEO Kevin Johnson.
Seattle-based Starbucks recently announced plans to close all of Teavna's 379 retail locations and will instead sell Teavana teas inside its approximate 27 thousand coffee shops. The company sold $1.6 billion in Teavana products in the last year, and believes the business can grow to $3 billion within the next five years. Starbucks acquired Teavana in 2012.
Tazo, founded in 1994, is sold in packaged bottles, teas and K-Cup forms, mostly through convenient and grocery stores. The target, which was acquired by Starbucks in 1999, has around $112.5 million in annual sales.
For Unilever, the acquisition will expand the company's presence in the U.S. premium tea category. The London-based company already owns the Lipton and Pure Leaf brands.
Consumer companies are reshaping their business lines through M&A. The Clorox Co. (NYSE: CLX) has sold the swabstick Aplicare brand to Medline Industries; Conagra Brands Inc. (NYSE: CAG) acquired Angie's Artisan Treats; and Kellogg Co. (NYSE: K) agreed to purchase protein bar maker RXbar.