Starbucks to Acquire La Boulange Bakery (SBUX)

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Seattle-based Starbucks Corporation (NASDAQ:SBUX) on Monday announced that it entered into an agreement to acquire La Boulange bakery for $100 million in cash. The acquisition will enable SBUX to improve its food offerings.

The acquisition of La Boulange comes as food continues to become an important part of SBUX’s revenue stream. Food segment now accounts for $1.5 billion in revenue a year at SBUX.

Starbucks plans to start replacing the current line of baked goods with baked goods from La Boulange early next year. The coffee chain plans to roll out the products in Bay area stores first before offering them nationally.

Cliff Burrow, President of Starbucks America, said that the company plans to take it one store at a time, beginning in metropolitan areas around the U.S.

Based in San Francisco, La Boulange bakery has 19 locations in the Bay area, serving salads and sandwiches apart from baked gods. SBUX is acquiring the bakery chain from Next World Group, which is a San Francisco-based privately held investment firm.

Investors, however, seem to have reacted negatively to SBUX’s latest acquisition, with shares falling more than 3% in pre-market trading on Tuesday.

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