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Published: Thu, May 10, 2018
Tech | By Dwayne Harmon

Nestlé pays £5.28 billion to sell Starbucks coffee you drink at home

Nestlé pays £5.28 billion to sell Starbucks coffee you drink at home

Food giant Nestle on Monday announced a $7.1 billion deal with Starbucks for the rights to sell the chains coffee, tea and food products in grocery stores and other outlets globally.

Nestle notes that this deal means it will be able to sell consumer packaged versions of Starbucks, Seattle's Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA and Torrefazione Italia products.

Nestle CEO Mark Schneider says it's a great day for coffee lovers.

Knockoff capsules - including Starbucks-branded ones - have dented one of Nestle's largest growth engines, its Nespresso portioned-coffee business.

According to recent reports, it has been confirmed that Starbucks and Nestle are joining hands to revitalize their coffee domains.

"Nestle expects this business to contribute positively to its earnings per share and organic growth targets as from 2019". Nestle will also put Starbucks in grocery stores outside the US and Canada.

Around 500 Starbucks employees will move to Nestle as part of the deal, although they will remain based in Seattle, where Starbucks' first shop was opened in 1971 and where its headquarters is based.

Nestle shares rose as much as 0.8 percent in early Zurich trading.

This alliance highlights Nestle's struggles to seize more java drinkers in the United States.

Starbucks, which in April reported a global drop in quarterly traffic to its established cafes, has been revamping its business amid competition in its key home market.

The investment of the European billionaire family Reimann has spent almost $30 billion for building a coffee empire by taking up the assets of companies like Keurig Green Mountain and Peet's.

Starbucks in November agreed to sell tea brand Tazo to Unilever for $384 million. We are delighted to have Starbucks as our partner.

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