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Starbucks and Nestlé are both struggling to boost growth, but the sales tie-up between the two companies shows the value of powerful brands.

The world's largest packaged food producer won't get any fixed assets in the deal, but expects Starbucks' name recognition both in the United States and across the globe to expand its market share.

"It allows Nestle to gain scale in the U.S., a weak spot so far", he said.

The agreement does not include bottled drinks like iced coffees and Frappuccinos that are sold in and outside of Starbucks stores.

Nestle added that it will pay the $7.15 billion upfront in cash for the rights to sell Starbucks coffee products in supermarkets, restaurants and catering operations.

Nestle shares rose as much as 0.8 percent in early Zurich trading.

Nestle won't get any physical assets in the deal.

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Nestle and Starbucks are teaming up to create a "global coffee alliance".

Nestle expects the deal to contribute positively to its earnings per share and organic growth targets from next year.

The company source said it would also pay market-linked royalties to Starbucks. The new deal will give the Swiss company control of Starbucks capsules, among other products.

But it does let Nestle sell Starbucks coffee in individual pods - as it does now with Nespresso and Nescafe - and expand sales of Starbucks soluble coffee, a key market in Asia.

Starbucks, strong mostly in the United States, will have the final say on expanding its product range.

The Swiss consumer goods giant said 500 Starbucks employees would transfer over to its business but they would continue to be located in Seattle, the group's headquarters for the last 47 years. Starbucks' chief financial officer called the valuation "very, very compelling". Nespresso several years ago also introduced a machine that is more attuned to United States consumers' preference for bigger cups of joe.