Global coffee alliance between Nestle and Starbucks


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 in a global alliance aimed at reinvigorating their coffee empires.


The deal for a business with $2 billion in sales reinforces Nestle’s position as the world’s biggest coffee company tries to fortify its place atop a fast-changing market.


Seattle-based Starbucks said it will use proceeds to speed-up share buybacks and the deal would add to earnings per share by 2021 at the latest.

Nestle said it expects the deal to sell Starbucks bagged coffee and drinks adding to earnings by 2019. It will not involve any of Starbucks’ cafes.


Nestle and Starbucks are joining forces in a highly fragmented consumer drinks category that has seen a string of deals lately.

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