Keurig Green Mountain Inc, the maker of the K-Cup single-serve coffee pod, will buy back more than half of Italian coffee maker Luigi Lavazza SpA's stake in the company for about $624 million.

Lavazza has been raising cash to fund its acquisition of French coffee brands L’Or and Grand Mere.

The company has bid more than €600 million for the brands, which are on the block as part of a merger of Mondelez International Inc's coffee business with Dutch rival DE Master Blenders 1753.

Lavazza, the world’s seventh-largest coffee maker, will slash its stake in Keurig to 2.9 per cent from 6.1 per cent, Keurig said in a statement on Monday.

The Italian coffee maker first bought a 7 per cent stake in Keurig in August 2010 for $250 million. Keurig’s stock traded at about $30 at the time and has nearly quadrupled since then through Friday’s closing.

Lavazza raised €44 million last month by selling 0.23 percent of its stake in Keurig.

L'Or, whose coffee pods unit is seen as the most valuable part of its business, is the fifth-largest maker of single-serve coffee pods in Western Europe, with a 4.4 per cent share of the market, according to Euromonitor.

Keurig said on Monday it would buy back about 5.2 million shares for $119.18 each - a 3 per cent discount to the stock’s Friday close.

The agreement also eliminates Lavazza’s pre-emptive rights on future issuances of Keurig’s shares.

Keurig’s shares were up about 1 per cent at $124 on Monday on the Nasdaq. – Reuters