Merger To Become Starbuck's Competitor

November 3, 2009

Two coffee companies which sell their products online and through retailers are merging - Diedrich (NASDAQ:DDRX) will be bought by Peet’s NASDAQ:PEET) for $26 a share or $213 million. The consideration is well above Diedrich’s current price of just over $20.

Diedrich sells it single serving products and beans through restaurants, stores, and coffeehouses. Peet’s sells coffee and tea through restaurants and food services establishments and also sells coffee and tea makers. Neither firm has a chain of stores like Starbucks does, but each competes with the Starbucks branded coffees sold in grocery stores and super markets.

The coffee industry is coming back to life as many company's stock prices rise. We'll have to see how this new merger and players like McDonald’s (NYSE:MCD) and Dunkin’ Donuts ultimately impact Starbucks.

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