Nestlé to pay $7.15 billion for rights to market Starbucks products globally
Nestlé has announced an agreement granting the company perpetual rights to market Starbucks consumer and foodservice products globally, outside of the company’s coffee shops.
Nestlé has announced an agreement granting the company perpetual rights to market Starbucks consumer and foodservice products globally, outside of the company’s coffee shops. This transaction provides Nestlé with a strong platform for continued growth in North America with leadership positions in the premium roast and ground and portioned coffee businesses. It also allows Nestlé to capture new growth opportunities in the rest of the world with Starbucks premium products. As a complete provider of coffee solutions, Nestlé will accelerate growth in out-of-home channels.
“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 CEO, Starbucks. “This historic deal is part of our ongoing efforts to focus and evolve our business to meet the changing consumer needs, and we are proud to work alongside a company that is committed to our shared values.”
“This transaction is a significant step for our coffee business, Nestlé’s largest high-growth category,” said Mark Schneider, CEO, Nestlé. “With Starbucks, Nescafé, and Nespresso we bring together three iconic brands in the world of coffee.”
As part of this transaction, Starbucks will receive an up-front cash payment of $7.15 billion for a business that generated annual sales of $2 billion. Nestlé expects this business to contribute positively to its earnings per share and organic growth targets as of 2019.
The agreement is subject to customary regulatory approval and is expected to close by the end of 2018. The agreement excludes ready-to-drink products and all sales of any products within Starbucks coffee shops.