>> Nestle the worlds biggest coffee company is paying Starbucks $7 billion in cash for the rights to sell its products. Like bagged coffee and drinks around the world in a global alliance that can give a jolt to the two coffee empires. With the deal Nestle would strengthen its position in the US where its only the number five player in the coffee market.
Starbucks, which is the world's biggest coffee chain, said it will use the money to speed up share buybacks. Saying it now expects to return about $20 billion in cash to shareholders over the next few years. Investors like that, shares of both companies getting a Monday morning pick me up.
The Nestle name will not appear on Starbucks products, which are popular with younger customers who have grown up with the brand. Nestle makes Nest Cafe and espresso which 57 year old George Clooney drinks in commercials. The source of the company told Reuters quote, we do not want the consumer to perceive that Starbucks is now part of the bigger family.
But the deal still needs approval from regulators. The company said they expect it to be finalized later this year.