Lavazza Buys Mars Coffee Units

Lavazza is broadening its operations in office coffee makers and vending machines with the acquisition, which was first reported by Bloomberg News. The transaction values the business at about $650 million, people with knowledge of the matter said earlier.

The Mars Drinks coffee business had sales of about $350 million in 2017 and employs about 900 people, according to a statement from the companies. The deal also includes coffee operations in Germany, the U.K., France, Canada and Japan.

The purchase comes as consumer-products companies, suffering as customers turn away from mass-market processed foods and drinks, increasingly see coffee as a key source of growth. A race for scale in the business has led to Coca-Cola Co. buying U.K. chain Costa from Whitbread Plc and Nestle SA striking a deal to market Starbucks Corp. products from beans to capsules, after JAB Holding Co. snapped up Keurig Green Mountain, Peet’s, Stumptown and other brands.

“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,” said Antonio Baravalle, chief executive officer of Lavazza Group.

Lavazza obtained about 400 million euros ($463 million) of financing for the purchase from a pool of banks including Intesa Sanpaolo SpA, UniCredit SpA and BNP Paribas SA’s Italian unit BNL, the people said. Spokesmen for Intesa and UniCredit declined to comment, while a representative for BNL wasn’t immediately available.