Nestle and Starbucks have finalised details of a licensing deal that will see the Swiss food giant market the Starbucks' packaged coffees and teas around the world.
The $7.15 billion deal grants Nestle perpetual rights to sell products such as Starbucks, Seattle's Best Coffee and Tea-vana outside of the American company's coffee shops, and will result in about 500 Starbucks employees shifting to Nestle.
"This partnership demonstrates our growth agenda in action, giving Nestle an unparalleled position in the coffee business with a full suite of innovative brands. With Starbucks, Nescaf and Nespresso we bring together the world's most iconic coffee brands," said Mark Schneider, Nestle CEO. "The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities," he added.
The agreement significantly strengthens Nestle's coffee portfolio in the North American premium roast and ground and portioned coffee business. It also unlocks global expansion in grocery and food service for the Starbucks brand, utilising the global reach of Nestle.
"This global coffee alliance with Nestle is a significant strategic milestone for the growth of Starbucks," said Kevin Johnson, president and CEO of Starbucks. "Bringing together the world's leading coffee retailer, the world's largest food and beverage company, and the world's largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders."
Approximately 500 Starbucks employees in the United States and Europe will join the Nestle family, with the majority based in Seattle and London. The international expansion of the business will be led from Nestle's global headquarters in Vevey, Switzerland.
