Nestlé to sell Starbucks products as part of multi-billion dollar deal
Food and drink manufactuter Nestlé SA had entered into a multi-billion dollar deal with Starbucks Corp. where the former obtained the rights to market the products of the giant coffee chain.
In a statement cited by Market Watch, Nestlé SA said it will pay Starbucks as much as $7.15 billion for the “perpetual rights” to market the products of Starbucks outside of its coffee shops.
“This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestlé,” said Kevin Johnson, president and chief executive officer of Starbucks.
Moving forward, the two companies will also work together on strategies to market those products.
Nestlé expects the deal to contribute positively to its earnings per share and organic growth targets starting 2019.
“This transaction is a significant step for our coffee business, Nestlé’s largest high-growth category,” said Mark Schneider, CEO of Nestlé.
As part of the deal, around 500 Starbucks employees will join Nestlé.