Nestle In US$7bn Deal To Sell Starbucks Products

Swiss food giant Nestle said on Monday that it will pay US$7.15 billion in cash for the rights to market Starbucks products around the world, outside of the company's coffee shops.

The agreement gives Nestle, which owns the Nescafe and Nespresso brands, a strong platform for continued growth in North America, the company said.

Nestle is focusing on coffee as a main growth area and has already made some acquisitions in the sector, including buying a stake in California's Blue Bottle Coffee last September.

The Starbucks business covered by the deal currently generates around US$2 billion sales annually and includes coffee beans and ground coffee that Nestle will be selling in supermarkets around the world.

The deal does not include any of Starbucks' coffee shops and cafes.

Around 500 Starbucks staff will join Nestle, the company said, adding that both companies would collaborate on "innovation and go-to-market strategies".

The transaction, which needs approval from regulators, should be finalised by the end of 2018. (AFP)