Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
LIVE TV DownloadNews18 App
News18 English
News18 » Business
1-min read

Nestle to Pay $7.15 Billion to Starbucks in Coffee Tie-up

Coffee is popular with millennials who have grown up with Starbucks and often seek out smaller brands. A willingness to pay up for exotic beans and specialty drinks means companies can brew up richer profit margins than in mainstream packaged food.

Reuters

Updated:May 7, 2018, 11:24 AM IST
facebookTwitter Pocket whatsapp
Nestle to Pay $7.15 Billion to Starbucks in Coffee Tie-up
(Representative Image | Source: Reuters)

Zurich: Nestle will pay Starbucks $7.15 billion as part of a global coffee alliance in which the Swiss-based food giant is getting the rights to market the U.S. coffee company's products around the world outside Starbucks' coffee shops.

Starbucks said on Monday it will use proceeds to speed-up share buybacks and the deal would add to earnings per share (EPS) by 2021 at the latest. Nestle saw the deal adding to earnings by 2019.

Nestle and Starbucks are joining forces in a highly fragmented consumer drinks category that has seen a string of deals lately.

JAB Holdings, the private investment firm of Europe's billionaire Reimann family, has fueled the consolidation wave with a series of deals including Douwe Egberts, Peet's Coffee & Tea and Keurig Green Mountain, narrowing the gap with Nestle.

"This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestle," said Starbucks Chief Executive Kevin Johnson.

Coffee is popular with millennials who have grown up with Starbucks and often seek out smaller brands. A willingness to pay up for exotic beans and specialty drinks means companies can brew up richer profit margins than in mainstream packaged food.

Starbucks plans to use the proceeds to accelerate share buybacks and now expects to return approximately $20 billion in cash to shareholders in the form of share buybacks and dividends through fiscal year 2020, it said.

It said the transaction was expected to add to earnings per share by the end of fiscal year 2021 or sooner, with no change to the company's currently stated long-term financial targets.

In a separate statement, Nestle said it expected the business to contribute positively to its earnings per share and organic growth targets from 2019.

Nestle, which will take on about 500 Starbucks employees as part of the deal, says its ongoing share buyback program would remain unchanged.

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, Telegram, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

Read full article
Next Story
Next Story

facebookTwitter Pocket whatsapp
Most Active
Company Price Change %Gain
Zee Entertain 345.15 12.43
ICICI Bank 498.25 0.66
Indiabulls Hsg 231.55 11.22
BPCL 514.10 -5.60
SBI 331.35 0.78
Company Price Change %Gain
Zee Entertain 345.25 12.40
Indiabulls Hsg 231.65 11.29
Reliance 1,537.25 -0.63
Vodafone Idea 6.64 -6.08
Yes Bank 64.25 -2.43
Top Gainers
Company Price Change %Gain
Zee Entertain 345.15 12.43
Eicher Motors 21,954.60 2.16
Adani Ports 372.10 1.47
Dr Reddys Labs 2,879.25 1.43
HUL 2,048.65 1.09
Company Price Change %Gain
HUL 2,049.50 1.15
Larsen 1,393.00 0.89
Bajaj Auto 3,188.55 0.82
SBI 331.35 0.81
HDFC Bank 1,283.15 0.75
Top Losers
Company Price Change %Gain
BPCL 514.10 -5.60
Tata Steel 385.10 -3.41
Coal India 196.60 -3.18
Bharti Airtel 426.30 -2.52
Yes Bank 64.25 -2.43
Company Price Change %Gain
Tata Steel 385.20 -3.35
Bharti Airtel 426.25 -2.52
Yes Bank 64.25 -2.43
ONGC 131.00 -1.98
ITC 245.70 -1.96

Live TV

Countdown To Elections Results
To Assembly Elections 2018 Results