According to DealReporter, the superior Peet's Coffee & Tea is in talks with inferior Starbucks to sell itself to the Seattle-based coffee giant. "Though neither company has commented on the reported deal, Peet's has stated its interest in getting into the single-cup coffee market. Earlier this year it attempted to acquire Diedrich Coffee but lost out to Green Mountain Coffee, which made a deal this week to sell Starbucks coffee for its single-serving Keurig coffee machines." Reports go on to suggest that "Starbucks plans to seek out acquisitions over the next 18 months." Hrumph.

Both companies, who have historical ties (Peet's used to own Starbucks), have had rumors swirling for months about a possible merging. "It's not about the coffee shops. It's about growing the grocery business. That's where (a possible merger) has a lot of synergies" Stifel Nicolaus analyst Steve West explains to CNBC. "What can Starbucks do with Peet's business in the next 2 to 3 years? They can probably double or triple it."

[DealReporter, SeattlePI]