Nestlé to pay Starbucks $7.15 billion for rights to sell its coffee
The move will offer Nestlé a platform for growth in North America and enable it to take advantage of new growth opportunities in the rest of the world.
Mark Schneider, chief executive of Nestlé, said: "This transaction is a significant step for our coffee business, Nestlé's largest high-growth category. With Starbucks, Nescafé and Nespresso we bring together three iconic brands in the world of coffee.”
Starbucks will receive an upfront cash payment of $7.15 billion for the business which generates annual sales of $2 billion. The transaction does not include any fixed assets.
Approximately 500 Starbucks employees will be transferred to Nestlé although operations will continue to be based in Seattle in the US.
The agreement is subject to customary regulatory approval and is expected to close by the end of 2018.
Kevin Johnson, president and chief executive of Starbucks, said: "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."
Email this article to a friend
You need to be logged in to use this feature.
Please log in here