(FinancialPress) — Food products giant Nestlé has struck a commercial and distribution deal with coffee king Starbucks. Nestlé will now pay $7.2 billion to sell and distribute Starbucks‘ packaged products worldwide, said the companies in a joint statement.
Nestlé thus adds Starbucks to its coffee products portfolio, which already includes Nescafe and Nespresso.
The deal is limited to packaged products sold outside of Starbucks‘ US-based stores. Its ready-to-drink coffees, juices and teas are not included in the agreement.
Kevin Johnson, Starbucks CEO, believes the deal “will bring the Starbucks experience to the homes of millions more around the world.”
“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. This historic deal is part of our ongoing efforts to focus and evolve our business to meet the changing consumer needs, and we are proud to work alongside a company that is committed to our shared values.”
The alliance is pending regulatory approval. Its parties expect it to be finalized by the upcoming summer or in the early fall.
The deal will bring in about 500 Starbucks employees into Nestlé‘s payroll.
The press release also states that Starbucks‘ packaged good business bring in about $2 billion in revenue yearly, at the moment.