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Nestle Gains Rights to Market Starbucks for $7B
Swiss food giant Nestle made a $7.15B deal, the third biggest in its 152-year history, by signing for the rights to market Starbucks-branded products. With 28,000 outlets around the world, Nestle is hoping that the Starbucks name will help increase sales, as their performance has been slowing.
According to BrandZ’s Global 2017 report, Starbucks is the second-most-valuable brand in fast-food, with an estimated worth of $44 billion. Starbucks is going to use the proceeds for stock buybacks, and expects to generate a return of $20 billion to shareholders by 2020.
Along with the naming rights, Nestle will take 500 employees who will remain in the Seattle region. According to brand strategists, coffee is an interesting category to establish success in because even if you have a recognizable brand, smaller brands are successfully marketing to their audiences by providing great experiences.
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