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Nestlé (NESN) has announced the completions of its US$7.1bn deal to acquire the perpetual global license to produce Starbucks (SBUX) branded products across the world.

Nestlé has acquired Starbucks consumer packaged goods and foodservice products globally, outside of the company’s coffee shops.

The two companies will work closely together on the existing Starbucks range of roast and ground coffee, whole beans as well as instant and portioned coffee as well as working together to enhance its fmcg product offerings.

Mark Schneider, Nestlé CEO, commented: “This partnership demonstrates our growth agenda in action, giving Nestlé an unparalleled position in the coffee business with a full suite of innovative brands. With Starbucks, Nescafé and Nespresso we bring together the world’s most iconic coffee brands.

“The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities.”

The agreement significantly strengthens Nestlé’s coffee portfolio in the North American premium roast and ground and portioned coffee business. It also unlocks global expansion in grocery and foodservice for the Starbucks brand, utilizing the global reach of Nestlé.

Kevin Johnson, president and CEO of Starbucks added: “This global coffee alliance with Nestlé is a significant strategic milestone for the growth of Starbucks. Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company, and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders.”

Approximately 500 Starbucks employees in the United States and Europe will join Nestlé as part of the deal, with the majority based in Seattle and London.

The international expansion of the business will be led from Nestlé’s global headquarters in Vevey, Switzerland.

The agreement covers Starbucks packaged coffee and tea brands, such as Starbucks, Seattle’s Best Coffee, TeavanaTM/MC, Starbucks VIA Instant, Torrefazione Italia coffee and Starbucks-branded K-Cup pods. It excludes Ready-to- Drink products and all sales of any products within Starbucks coffee shops.

Morning update

It’s a quiet morning back after the Bank Holiday with little news of note on the markets this morning.

The FTSE 100 has started the week on the front food, opening 0.7% higher at 7,628.6pts following progress on the NAFTA trade agreement between the US, Mexico and Canada.

It’s been a good start to the week for UK supermarkets, with Tesco (TSCO) one of the FTSE 100’s largest gainers, rising 1.1% to 257.4p, while Morrisons (MRW) is up 1% to 269.5p and Sainsbury’s is up 0.6% to 338.4p.

Ther sector’s biggest riser is stevia producer PureCircle, which is up 5.2% to 331.5p after it noted higher than usual trading activity in its shares on Friday, but said there was no price-sensitive information that triggered a sharp share price drop towards the end of last week.

Other risers include TATE & Lyle (TATE), up 1.9% to 651.2p, Nichols (NICL), up 1.5% to 1,462p and Just Eat (JE), up 1.5% to 797.4p.

Fallers include Premier Foods (PFD), down 3.9% to 41.4p, PayPoint (PAY), down 0.9% to 928.8p and Associated British Foods (ABF), down 0.5% to 2,348p.

This week in the City

Newsflow remains slow this week, with activity picking up once more next week as we head into September.

There is a smattering of company news this week, most notably WH Smith (SMWH) releasing a pre-close statement to detail full-year sales on Thursday.

Also in the UK agriculture group Total Produce (TOT) will release interim results on Thursday.

Internationally, Hain Celestial (HAIN) will issue its full year results later today, while Pernod Ricard (RI) will announce its full year earnings tomorrow.

In economic news, the monthly GFK UK consumer confidence figures will be released on Friday.