Nestle to pay $7.15B to sell Starbucks packaged coffee

Nestle Spends $7.15 Billion To Sell Starbucks Coffee

Nestle Spends $7.15 Billion To Sell Starbucks Coffee

The agreement only covers Starbucks' packaged goods sold outside the United States company's stores.

In the third-biggest transaction in Nestle SA's 152-year history, the Swiss food giant will spend $7.15 billion for the right to market Starbucks Corp. products from beans to capsules, marrying its worldwide distribution network with the allure of arguably the biggest name in java.

It is a bold stroke by new Nestle Chief Executive Mark Schneider, who has made coffee a strategic priority as he tries to convince uneasy shareholders, including activist Third Point, that he can boost the sprawling group's performance.

The Starbucks brand will also be represented on Nestle's single-serve capsule systems.

"This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestle", Kevin Johnson, president and CEO of Starbucks was quoted as saying in the Nestle statement.

That sounds like a lot to use the Starbucks name.

The deal also includes the Teavana tea brand, although it excludes ready-to-drink products and all sales within Starbucks coffee shops.

For 2017, Starbucks channel development unit booked a 4% rise in revenue year-on-year - something of a slowdown from the growth rate of 10% reported in the prior year.

Starbucks, strong mostly in the United States, will have the final say on expanding its product range.

While Starbucks holds the crown in the US$13.8 billion USA coffee market, Nescafe and Nespresso hold the top ranks globally, according to Euromonitor. The agreement is expected to close by the end of this year.

"However, Nestle's leadership position is less secure than it once was".

Nestle won't get any physical assets in the deal. Nestle will also put Starbucks in grocery stores outside the US and Canada. And past year, Nestle bought a majority stake in high-end coffee company Blue Bottle.

Nestle CEO Schneider a year ago identified coffee as an area of investment.

Recommended News

  • Dodgers Throw Combined No-Hitter vs. Padres

    Dodgers Throw Combined No-Hitter vs. Padres

    It was a slugging clinic in the rout, with three home runs, including Will Chambers Santa Clarita leading ninth of the season. Albert Pujols , aka "The Machine", hit a single into shallow right field to get to the historic mark of 3,000 hits.
    Air France shares plummet after CEO quits

    Air France shares plummet after CEO quits

    Strikes over the pay dispute, due to resume on May 7 and May 8, have cost the company 300 million euros (£265.5 million) so far. The government's response is seen as a test of labour reforms launched by French President Emmanuel Macron.
    Giuliani: Cohen might have paid other women

    Giuliani: Cohen might have paid other women

    Either way, Giuliani said it's time for Deputy Attorney General Rod Rosenstein to shut down Mueller's investigation. Daniels' lawyer Michael Avenatti reacted swiftly to the revelation, accusing the United States president of lying.
  • Police deploy three additional mobile units to Birnin Gwari

    Police deploy three additional mobile units to Birnin Gwari

    The attack came about a week after other unidentified gunmen attacked a nearby village at the Birnin Gwari area. The attack, which tookmplace in Gwaska Village, in the Birnin Gwari area, saw a mass slaughter take place.
    Justify wins Kentucky Derby on soggy track

    Justify wins Kentucky Derby on soggy track

    This is a bad post position , and there's no indication that Combatant, with one win in eight starts, can muster much from it. Jockeys want to avoid anything that would prevent their horse from getting into rhythm, like being bumped, cut off or blocked.
    2 killed, 5 missing after natural disaster  hits Johannesburg gold mine

    2 killed, 5 missing after natural disaster hits Johannesburg gold mine

    Almost two weeks later, a mine worker died at Sibanye-Stillwater's Driefontein operations near Carletonville, the very same mine where the latest incident took place.
  • Residence chaplain delivers 1 St prayer since rescinding resignation

    Residence chaplain delivers 1 St prayer since rescinding resignation

    In his letter from this week, Conroy noted the apparent lack of consultation with other House members before his attempted ouster. Father Conroy told The New York Times , at the time , that he wasn't going to question the decision.
    Mets GM: Decision to DFA Harvey was 'a long time coming'

    Mets GM: Decision to DFA Harvey was 'a long time coming'

    Harvey returned in 2015 and went 13-8 with a 2.27 ERA as the Mets reached the World Series for the first time since 2000. Just a few weeks after being moved to the bullpen by the New York Mets, Matt Harvey is close to joining another team .
    Cowboys' Witten retires, joins ESPN broadcast booth

    Cowboys' Witten retires, joins ESPN broadcast booth

    The Dallas Cowboys drafted Witten out of the University of Tennessee in the third round of the 2003 NFL Draft (69th pick overall). At the same time, we're going to be so supportive of him if he decides it's time to make a change in his career path.
  • Sharks vs. Golden Knights, Game 5 on Friday

    Sharks vs. Golden Knights, Game 5 on Friday

    The Vegas Golden Knights are averaging 3.3 goals per game and are scoring on 21.4 percent of their power play opportunities. Since then the Sharks had improved their puck management. slowing down the Golden Knights' sharp transition game.
    Kentucky native writes new Celine Dion song for 'Deadpool 2'

    Kentucky native writes new Celine Dion song for 'Deadpool 2'

    Dion has had an incredible career, sold countless records and performed the most iconic movie song of all time. The singer previously teased that we would be hearing new music from her soon, but none of us expected this.
    State Schools Get Home Course Advantage in Golf's Postseason

    State Schools Get Home Course Advantage in Golf's Postseason

    Shaufler said the team needs to practice for its first appearance in the tournament the same way it has practiced all year. OU's Ryan Hybl is the Big 12 Coach of the Year after leading the Sooners to the conference championship.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.