September 10, 2012 / 10:00 PM / 6 years ago

Lavazza raises stake in Green Mountain Coffee

A Green Mountain Coffee single-serve K-Cup is pictured in New York, May 3, 2012. REUTERS/Brendan McDermid

(Reuters) - Luigi Lavazza SpA increased its stake in Green Mountain Coffee Roasters Inc GMCR.O, giving the Italian coffee roaster control of 6.8 percent of the U.S. company, a securities filing showed on Monday.

Lavazza now owns about 10.5 million shares of Green Mountain, owner of the Keurig single-cup coffee brewing system and the “K-Cups” that go with it. Before starting on August 30 to buy more shares, Lavazza had owned 7.7 million shares, or 4.99 percent of Green Mountain. That was down from a prior stake of 5.5 percent.

“Lavazza made the new purchases in order to reaffirm its position as a significant minority stockholder in the issuer and to continue to strengthen the long-term cooperative and strategic relationship between Lavazza and the issuer,” Lavazza said in the filing with the U.S. Securities and Exchange Commission.

Green Mountain is the leader in the small-but-growing U.S. market for single-serve coffee. But its dominance is being threatened by a host of lower-cost rivals who are making Keurig-compatible coffee cups, now that two of Green Mountain’s patents are set to expire this month.

One way Green Mountain is addressing this threat to sales and profits is by developing new, proprietary machines. In addition to its higher-end Vue system, it is working with Lavazza, Italy’s leading coffee roaster, on a single-cup espresso machine.

Green Mountain shares were up 1.3 percent at $30.75 in after hours trading. They closed at $30.36 on the Nasdaq, up 9 percent on heavy volume.

That was their second straight session of steep gains following a bullish commentary on Friday by an analyst who initiated coverage on the stock with a “buy” rating.

Reporting By Martinne Geller in New York; Editing by Andre Grenon, Bob Burgdorfer and Tim Dobbyn

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