February 14, 2011 / 9:04 PM / 7 years ago

UPDATE 2-Starbucks, Green Mountain in partnership talks-source

* Starbucks wants dominant position in single-cup market

* Green Mountain’s Keurig brewer now dominates segment

* Green Mountain shares jump on news of negotiations (Recasts to add Starbucks talks; adds LOS ANGELES to dateline, bylines)

By Lisa Baertlein and Mihir Dalal

LOS ANGELES, Feb 14 (Reuters) - Starbucks Corp (SBUX.O) and Green Mountain Coffee Roasters GMCR.Ohave been in “ongoing partnership negotiations”, a source close to the talks told Reuters on Monday, sending Green Mountain stock surging.

Starbucks, the world’s biggest coffee chain, wants to be a big player in the new and fast-growing single-serve coffee segment that Green Mountain currently dominates with its Keurig one-cup brewers.

Starbucks on Sunday said it planned to announce a new product for the single-cup coffee market in the near future, reviving speculation of a tie-up between the two companies.

The person close to the partnership talks would not say if the pending announcement would involve Green Mountain.

A Starbucks spokesman declined comment on the negotiations. Before news of the talks broke, Green Mountain spokeswoman Suzanne DuLong said the company had no comment on speculations around potential partnerships.

Green Mountain shares surged as much as 13.5 percent to a high of $47.81 before backtracking. Shares, which were briefly halted after Reuters reported the talks, were up 7.4 percent to $46.65 in the last our of trading.

Shares in Starbucks were up 0.8 percent to $33.61.

Editing by Bernard Orr

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