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Lavazza Group Pacts To Acquire Mars Drinks Including Flavia And Klix

TURIN, Italy -- The Lavazza Group has announced an agreement to acquire Mars Drinks, including the Flavia and Klix systems, from Mars Inc . The transaction is expected to close by the end of 2018, subject to regulatory approvals and the completion of procedures. The terms were not disclosed. Under terms of the agreement, the Lavazza Group will acquire Mars' coffee businesses in North America, Germany, the United Kingdom, France, Canada and Japan, including its related systems and its production facilitie...

October 1, 2018

TURIN, Italy -- The Lavazza Group has announced an agreement to acquire Mars Drinks, including the Flavia and Klix systems, from Mars Inc. The transaction is expected to close by the end of 2018, subject to regulatory approvals and the completion of procedures. The terms were not disclosed.

Under terms of the agreement, the Lavazza Group will acquire Mars' coffee businesses in North America, Germany, the United Kingdom, France, Canada and Japan, including its related systems and its production facilities in the UK and the United States. This is in line with Lavazza's strategy of consolidation at the international level.

The acquisition includes the Flavia countertop brew-by-pack machines business and the Klix free-standing in-cup soluble beverage vending machine business, both of which have large installed bases in the markets they serve, and a broad portfolio of coffee and other hot beverages commercialized under proprietary brands like Alterra and through licensed brands. The businesses involved in the acquisition generated a turnover of approximately $350 million (U.S.) in 2017, and have a workforce of approximately 900 people.

"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," according to Lavazza Group chief executive officer Antonio Baravalle. "Indeed, this acquisition strengthens the Lavazza Group's position in the OCS and vending segments, which offer considerable opportunities for growth and development."

He added that the transaction with Mars, Inc. "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."

Discussing on the agreement, Mars Inc. chief executive officer Grant F. Reid CEO/Office of the President, Mars, Inc.  said: "Mars Drinks has been an important part of our business for many years, and while it's always hard to say goodbye to great brands, valued associates and friends, we believe now is the right time for a change. We are confident this decision will better enable long-term success for the drinks business with Lavazza – a company that shares our values and has a dedicated focus on beverages – and will allow the business and its associates to continue to thrive."

In line with its previous acquisitions, which include Carte Noire and ESP in France, Merrild in Denmark, Kicking Horse Coffee in Canada, NIMS in Italy and Blue Pod Coffee in Australia,  Lavazza intends to continue to enhance the acquired businesses. This will strengthen its direct coverage of all segments of the coffee markets concerned, with particular emphasis on away-from-home, by using an approach based on increasingly direct interaction with consumers.

Established in 1895 in Turin, Italy, the Italian roaster has been owned by the Lavazza family for four generations. Among the world's  largest coffee companies, the Lavazza Group currently operates in more than 90 countries through subsidiaries and distributors, with 63% of revenues coming from markets outside of Italy. With more than 25 years' experience, Lavazza was a pioneer in the production and sale of portioned coffee systems and products. Lavazza was the first Italian company to offer capsule espresso systems.

Mars is a family-owned business with more than a century of history making diverse products. With more than $35 billion in sales, the company is a global business producing some of the world's best-loved brands including M&M's, Twix, Milky Way, Dove,  Skittles, Uncle Ben's and Cocoavia. Headquartered in McLean, VA, Mars operates in more than 80 countries.