Starbucks Coffee Co. has announced the company will be buying Teavana Holdings Inc. for $260 million in cash as it tries to push its way into the tea market.
Teavana was founded in 1997, in Atlanta, Georgia and offers a variety of products including, 100 kinds of premium loose-leaf teas, artisanal tea equipment, and other merchandise. After Starbucks announced that it will be buying the tea company, Teavana’s shares increased about 59 percent to $16.06 a share.
According to Starbucks, the global tea industry is valued at about $40 billion and is growing rapidly. Starbucks states that it plans to expand Teavana’s 300 mall-bases stores and will also be adding a high-profile neighborhood store concept. The coffee giant already owns Tazo Tea, which Starbucks bought in 1999, and is now worth $1.4 billion.
The Seattle based company has already begun expanding into the juice market, and have announced its plans to build Evolution Fresh chain stores in California in the fall. In June, Starbucks will be opening its first standalone tea shop, which will be operated under the Tazo Tea brand.