As part of the transaction, Starbucks will receive an up-front cash payment of $7.15 billion, while approximately 500 Starbucks employees will join the Nestlé business to drive performance and expansion. Nestlé expects the deal to improve its organic growth targets as from 2019.
It is thought that one of the main drivers of the deal is the introduction of Starbucks-branded single-use pods for the immensely popular Nespresso coffee machines.
“This transaction is a significant step for our coffee business – Nestlé’s largest high-growth category – and a great day for coffee lovers all over the world” said Mark Schneider, CEO, Nestlé. “With Starbucks, Nescafé and Nespresso we bring together three iconic brands in the world of coffee, and we are delighted to have Starbucks as our partner.
The agreement is subject to customary regulatory approval and is expected to close by the end of 2018.