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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
Comments (6)
  • Rinascimento
    , contributor
    Comments (1029) | 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 (944) | 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 (1029) | 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 (944) | 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 (1029) | 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
    Comment (1) | Send Message
     
    Great news!
    12 Nov 2013, 08:58 PM Reply Like
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