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Unilever PLC has agreed to pay $384 million to buy Tazo tea from Starbucks Corp. It is speculated Unilever is making the purchase to shift from slower-growing black tea toward higher-growth brands, cater to millennial preferences and enhance the company’s existing tea offerings, including Lipton, Pure Leaf, PG Tips and Pukka.
According to the deal, Unilever will secure the Tazo brand, its related recipes, intellectual property and inventory. Starbucks acquired Tazo, which registered $112 million in sales over the last 12 months, for $8.1 million in 1999. It decided let go of Tazo to concentrate its efforts on building its Teavana brand.
