Bulletin: Starbucks Corp.'s Agreement With Nestle For Packaged Coffee And Tea Is Credit Neutral; Ratings Unchanged

NEW YORK (S&P Global Ratings) May 7, 2018--S&P Global Ratings said today that its ratings and outlook on Starbucks Corp. (A-/Stable/A-2) are not affected by the company's announcement that it plans to sell the global licensing rights of its consumer and foodservice products to Nestle S.A. for gross proceeds of about $7.1 billion. Starbucks expect the transaction to close in the second half of 2018, subject to regulatory approval. We believe the relationship with Nestle will bring Starbucks' branded products to new markets that would increase the company's brand awareness to drive performance growth. It would also expand Starbucks' existing partnership arrangements with food manufacturers including PepsiCo. As part of the agreement, Nestle will obtain the rights to market, sell,

...NEW YORK (S&P Global Ratings) May 7, 2018--S&P Global Ratings said today that its ratings and outlook on Starbucks Corp. (A-/Stable/A-2) are not affected by the company's announcement that it plans to sell the global licensing rights of its consumer and foodservice products to Nestle S.A. for gross proceeds of about $7.1 billion. Starbucks expect the transaction to close in the second half of 2018, subject to regulatory approval. We believe the relationship with Nestle will bring Starbucks' branded products to new markets that would increase the company's brand awareness to drive performance growth. It would also expand Starbucks' existing partnership arrangements with food manufacturers including PepsiCo. As part of the agreement, Nestle will obtain the rights to market, sell, and distribute packaged coffee and tea under Starbucks' brands including Seattle's Best Coffee and Teavana, in the global at-home and away-from-home channels. Starbucks will retain sourcing, roasting, and brand management....

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