Starbucks enters $7.15bn agreement with Nestlé to expand globally

8th May 2018 (Last Updated May 8th, 2018 12:02)

Global coffeehouse chain Starbucks has entered into a $7.15bn global licence agreement with Nestlé to expand the presence of its brand globally in foodservice and consumer packaged goods (CPG) industries.

Starbucks enters $7.15bn agreement with Nestlé to expand globally
Credit: Starbucks Corporation.

Global coffeehouse chain Starbucks has entered into a $7.15bn global licence agreement with Nestlé to expand the presence of its brand globally in foodservice and consumer packaged goods (CPG) industries.

As part of the deal, Nestlé will acquire rights to market, sell, and distribute Starbucks packaged coffee and tea brands including Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA and Torrefazione Italia in the US and across the world.

Under the terms of the deal, Nestlé will pay $7.15bn to the coffeehouse chain in closing consideration.

“This historic deal is part of our ongoing efforts to focus and evolve our business to meet changing consumer needs.”

In addition, Starbucks will retail a significant stake as licensor and supplier of roast coffee, ground coffee and other products and Nestlé will represent Starbucks’s brand portfolio on its single-serve capsule systems.

Starbucks president and chief executive officer Kevin Johnson 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.

“This historic deal is part of our ongoing efforts to focus and evolve our business to meet changing consumer needs, and we are proud to work alongside a company that is committed to our shared values.”

The deal will enhance Nestlé’s retail and foodservice presence in the US and complement its position in instant and super-premium single serve coffee offerings through Starbucks’s presence in K-cup pods.

Scheduled to close in summer or early autumn this year, the agreement excludes ready-to-drink coffee, tea and juice products.