Nestle, the world's largest food and beverage company, says it will pay Starbucks seven-point-one billion U.S. dollars in cash to sell the coffee giant's products in retail outlets outside of Starbucks chains.
The deal gives Swiss-based Nestle the rights to market, sell and distribute bags of Starbucks coffee beans, instant coffee, as well as teas.
But the agreement does not include bottled drinks, such as iced coffees and Frappuccinos, which are already sold in and outside Starbucks stores.
Starbucks CEO Kevin Johnson called the deal a "global coffee alliance" adding it will "bring the Starbucks experience to the homes of millions more around the world."
It needs to be approved by regulators and is expected to be finalized later this year.