Nestle and Starbucks completed a $7.15 billion licensing deal that will see Nestle manufacture and sell Starbucks packaged coffee and tea in international markets.

The agreement, announced in May, gives Nestle access to the Starbucks, Seattle’s Best Coffee, Teavana, Starbucks Via and Torrefazione Italia brands. Starbucks will continue to manufacture and supply coffee for the U.S., while Nestle has rights for all other markets. With the license, Nestle gets a business that currently generates about $2 billion in annual revenue. The agreement excludes ready-to-drink products (for which PepsiCo is the licensee) and sales through Starbucks’ own shops.

Starbucks products will be sold through Nestle’s distribution in 189 countries and gain access to the company’s installed base of single-serve Nespresso and Nescafe Dulce Gusto machines.

The non-U.S. business previously was licensed by Starbucks to Kraft Foods in 1998, before switching to Acosta Inc. in 2011.

The deal with Nestle is part of a “streamlining” of Starbucks — the chain also sold its Tazo tea business to Unilever – that will “free up billions of dollars of capital”, Starbucks CEO Kevin Johnson has said. Starbucks’ expansion plans include adding 600 stores annually in China to reach 6,000 locations in 230 cities, by 2021.

Contacts:

Starbucks, John Culver, Group President of International, Channel Development and Global Coffee and Tea, 206-447-1575.

Nestle, Deborah McRonald, Assistant VP and Head of Licensing, 973-593-7500