Global food company Nestlé said on Monday it would pay Starbucks $7.15 billion (Rs 48 lakh crore) to get perpetual rights to sell its products around the world. About 500 employees of Starbucks will move to Nestlé, though they will stay on in Seattle, where their current headquarters is located.
The Swiss company will sell Starbucks coffee and tea outside its outlets and the companies will also work together on strategies to market Starbucks products. The transaction does not include the transfer of any fixed assets. Nestlé’s name will not appear on Starbucks products, Reuters reported.
“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 Starbucks President and Chief Executive Officer Kevin Johnson.
Nestlé CEO Mark Schneider called the transaction “a significant step for our coffee business”. “With Starbucks, Nescafé and Nespresso we bring together three iconic brands in the world of coffee,” he said.
Starbucks’ shares were up 3% before Monday’s opening trade, while Nestlé shares traded 1% higher in Zurich, Market Watch reported.