Coffee giants join forces as Nestle gets to distribute Starbucks’ products worldwide

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In an unusual deal food giant Nestle will pay Starbucks nearly six billion euros in cash for the rights to sell the U.S. coffee chain’s products around the world.
Seattle-based Starbucks, the world’s biggest coffee chain, said it will use the proceeds to speed share buybacks and the deal would add to earnings per share by 2021 at the latest.

Nestle said it expects the deal to sell Starbucks bagged coffee and drinks adding to earnings by 2019. It will not involve any of Starbucks’ cafes or ready-to-drink products.

But it does let Nestle sell Starbucks coffee in individual pods — as it does now with Nespresso and Nescafe — and expand sales of Starbucks soluble coffee, a key market in Asia.

The Nestle name will not appear on Starbucks products.

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