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Nestlé SA said Monday it has entered a deal to market coffee chain Starbucks Corp.’s consumer and foodservice products.
The deal gives the Swiss food and drink group “perpetual rights” to market Starbucks products globally outside of its coffee shops, and will pay it $7.15 billion up front as part of the agreement. The companies will also work together on strategies to market those products, but doesn’t include the sales of products sold in Starbucks 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.
Nestlé expects the business to contribute positively to its earnings per share and organic growth targets from 2019. Around 500 Starbucks employees will join Nestlé as part of the deal, which is expected to close by the end of 2018.
“This transaction is a significant step for our coffee business, Nestlé’s largest high-growth category,” said Mark Schneider, CEO of Nestlé.
The companies will hold a press conference at 1:30 p.m. Eastern to provide further details on the deal on Monday.