Nestle to pay Starbucks $7.15B: What it means for us

Two consumer powerhouses are forming a global mega-alliance drawing on the power of caffeine and chocolate.

Swiss-based food giant Nestle will pay Starbucks $7.15 billion in cash for the rights to sell the U.S. coffee chain’s products around the world, tying a premium brand to Nestle’s global distribution muscle, the companies themselves are saying.

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“We are entering an agreement to market Starbucks consumer and food-service products, bringing together world’s most iconic coffee brands,” Nestle (@Nestle) tweeted early Monday.

“We are delighted to have Starbucks as our partner,” the company also said. “We both have a true passion for outstanding coffee, and take pride in responsible and sustainable coffee sourcing.”

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It’s the third-biggest transaction in Nestle SA’s 152-year history, Bloomberg News reported, with the Swiss food giant buying the right to market Starbucks products from beans to capsules, marrying its international distribution network with what is thought to be the biggest name in coffee.

Nestle won’t get any physical assets in the deal, Bloomberg also reported. Starbucks has some 28,000 outlets around the globe.

We are entering an agreement to market Starbucks consumer and foodservice products, bringing together world’s most iconic coffee brands: https://t.co/SUg7T7KtnG pic.twitter.com/DERXQYgYmb
— Nestlé (@Nestle) May 7, 2018