ZURICH, Switzerland - (UPDATED) Swiss food giant Nestle announced Monday it will pay $7.15 billion for the rights to market Starbucks products around the world, outside of the company's coffee shops.
The agreement gives Nestle, which owns the Nescafe and Nespresso brands, a strong platform for continued growth in North America, the company said in a statement.
"This transaction is a significant step for our coffee business, Nestle's largest high-growth category," said Nestle CEO Mark Schneider in a statement.
"Both companies have true passion for outstanding coffee and are proud to be recognized as global leaders for their responsible and sustainable coffee sourcing."
The deal does not include any of Starbucks' coffee shops and cafes.
Around 500 Starbucks staff will join Nestle, the company added.
The deal will create a "global coffee alliance", Starbucks president and CEO Kevin Johnson said.
The transaction, which needs approval from regulators, should be finalized by the end of 2018.