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Nestlé Brews $7.15 billion deal to sell Starbucks coffee, tea

Nestle Starbucks deal
Nestlé today entered a US$7.15 billion cash agreement for the perpetual global license of Starbucks consumer and foodservice products, creating a global coffee alliance that brings together the Nescafé, Nespresso and Starbucks brands.

The deal gives Nestle the rights to market, sell and distribute Starbucks®, Seattle’s Best Coffee®, Starbucks Reserve®, Teavana™, Starbucks VIA® and Torrefazione Italia® packaged coffee and tea in all global at-home and away-from-home channels. The agreement, subject to regulatory approval, excludes ready-to-drink (RTD) coffee, tea and juice products and sales of any products within Starbucks coffee shops.

The global coffee alliance also 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, and allows Nestlé to capture new growth opportunities in the rest of the world with Starbucks premium products. The two companies will work closely together on innovation and go-to-market strategies to bring the best coffee to customers around the world.

“This transaction is a significant step for our coffee business, Nestlé’s largest high-growth category,” said Mark Schneider, CEO of Nestlé. “Both companies have true passion for outstanding coffee and are proud to be recognized as global leaders for their responsible and sustainable coffee sourcing.”

“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 of 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.”

Roughly 500 Starbucks employees will join Nestlé to drive performance of the existing business and global expansion, and operations will remain in Seattle.

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