Nestle and Starbucks are teaming up to create a "global coffee alliance."
Under the deal, Nestle will pay $7.2 billion to market, sell and distribute Starbucks' packaged coffees and teas around the world, the companies said Monday.
Nestle already has a significant presence in the coffee business with well-known brands like Nescafe and Nespresso. It's now adding Starbucks coffee and tea products to the list.
The agreement only covers Starbucks' packaged goods sold outside the US company's stores. It doesn't include Starbucks' ready-to-drink coffee, tea or juices.
Starbucks CEO Kevin Johnson said the deal "will bring the Starbucks experience to the homes of millions more around the world."
The deal still needs approval from regulators and is expected to be finalized in summer or early fall this year, the companies said.
About 500 Starbucks employees will join Nestle under the agreement, the Switzerland-based company said.
It said the Starbucks packaged goods business generates annual revenue of about $2 billion a year.
- Nestle is paying $7.2 billion to sell Starbucks coffee
- Starbucks-Nestle deal; Oil tops $70; Air France crisis
- Nestle selling U.S. candy brands to Nutella company
- Magnitude 7.2 earthquake jolts southeastern Mexico
- Starbucks launches new credit card for coffee addicts
- Starbucks battles its China sales slump with coffee delivery
- Starbucks may let customers pay with bitcoin
- Would you pay a tax on coffee cups?
- Nestle is making a pink KitKat from ruby chocolate
- Dan Loeb was right. Nestle needs an overhaul