Nestle Enters Agreement With Starbucks for Consumer, Foodservice Products

   By Anthony Shevlin

Nestle SA (NESN.EB) said Monday that it has entered an agreement with Starbucks Corp. (SBUX) for the coffee chain's consumer and foodservice products.

The Swiss company said Starbucks will receive an upfront cash payment of $7.15 billion for the business, with annual sales of $2 billion, as part of a global perpetual license. The transaction doesn't include any fixed assets and excludes Starbucks' ready-to-drink products.

Nestle said the deal doesn't include the sales of any products within Starbucks coffee shops.

Approximately 500 Starbucks employees will join Nestle and operations will be located in Seattle, the company said.

Mark Schneider, chief executive of Nestle, said: "This transaction is a significant step for our coffee business, Nestle's largest high-growth category."

Write to Anthony Shevlin at anthony.shevlin@dowjones.com

(END) Dow Jones Newswires

May 07, 2018 01:32 ET (05:32 GMT)

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