Starbucks to pay $2.75B in Kraft dispute to Mondelez


Starbucks (SBUX) has been ordered by an arbitrator to pay ~$2.75B for prematurely terminating its grocery store distribution deal with Kraft Foods (KRFT) in 2011.

The payment will be made to Mondelez International (MDLZ), which took over Kraft's grocery operation in its spin off. The award includes $2.23B in damages and $527M in prejudgement interest and attorneys' fees.

Mondelez intends to use the after-tax proceeds for share repurchases.

SBUX -1.6%, MDLZ +3.3%, and KRFT +0.4% AH

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Comments (6)
  • Rinascimento
    , contributor
    Comments (1631) | Send Message
     
    Why don't use part of the money for a special dividend payment
    12 Nov 2013, 07:46 PM Reply Like
  • Energysystems
    , contributor
    Comments (2112) | Send Message
     
    I don't mind the stock buyback, as long as it reduces share count(as opposed to allow execs to awarded more shares). This will add 1.7B(aftertax) to the previously announced buyback program of $6B.
    12 Nov 2013, 08:11 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1631) | Send Message
     
    Wow $6B buyback already!! this looks good for stock appreciation
    maybe I lucked out on MDLZ
    thank you
    12 Nov 2013, 09:00 PM Reply Like
  • Energysystems
    , contributor
    Comments (2112) | Send Message
     
    Oh yeah! Current buyback($6B) program accounts for 10.5% of shares outstanding, this should(after tax) account for 13.3-13.5% of shares outstanding. I bought pre-split, holding both for the long term but am more optimistic about $MDLZ.
    12 Nov 2013, 09:11 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1631) | Send Message
     
    Great news!! i bought pre split myself and now I have to just watch it grow with a growing dividend reinvested and capital gains
    thank you
    12 Nov 2013, 09:23 PM Reply Like
  • kadie1414
    , contributor
    Comments (12) | Send Message
     
    Great news!
    12 Nov 2013, 08:58 PM Reply Like
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