Today marks a great day for coffee lovers around the world as Swiss based company Nestlé will now sell Starbucks coffee globally. The food giant will pay Starbucks $7.15 billion in cash for the rights to sell the coffee chain’s products outside of their coffee shops.
According to a press release, 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 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, 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.”
The transaction will provide Nestlé with a strong platform for continued growth in North America with leadership positions in the premium roast and ground and portioned coffee businesses. The company expects the partnership to contribute positively to its earnings per share and organic growth targets as from 2019.
Nestlé will take 500 Starbucks employees
“This transaction is a significant step for our coffee business, Nestlé’s largest high-growth category,” said Mark Schneider, CEO, Nestlé. “With Starbucks, Nescafé and Nespresso we bring together three iconic brands in the world of coffee. We are delighted to have Starbucks as our partner. 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 is a great day for coffee lovers around the world.”
As part of the deal, the Swiss company will take 500 Starbucks employees. Operations will continue to be located in Seattle. Nestle’ share-buyback program will remain unchanged.
The transaction is expected to close by the end of 2018 and excludes Ready-to-Drink products, as well as all sales of any products within Starbucks coffee shops.