Keurig Green Mountain Inc, the maker of the K-Cup single-serve coffee pod, will buy back nearly half of Italian coffee maker Luigi Lavazza SpA's stake in the company for about $624 million.
Lavazza, the world's seventh-largest coffee maker, has slashed its stake in Keurig to 6.6 percent as of Feb. 4 from 7.8 percent as of Jan. 26 to fund acquisitions.
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Lavazza has bid more than 600 million euros ($708 million) for L'Or and Grand Mere, two French coffee brands put up for sale to ease a merger of U.S.-based Mondelez International Inc's coffee business with Dutch rival D.E. Master Blenders 1753.
Keurig said on Monday it would buy back about 5.2 million shares for $119.18 each, which represents a 3 percent discount to the stock's Friday close.
The agreement also eliminates Lavazza's pre-emptive rights on future issuances of Keurig's shares.
Keurig's shares were up about 1 percent at $124 in light premarket trading on Monday. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Kirti Pandey)