Starbucks buys its China business

Paterniano Del Favero
Luglio 27, 2017

Starbucks views East China as a "significant and strategic region", with Shanghai containing almost 600 stores.

The coffee chain said on Thursday it would buy out its joint venture partners in that business, shelling out $1.3 billion for the 50% it doesn't already own in Starbucks' biggest deal ever.

The all cash deal will be the single largest transaction in Starbucks' history and would give it full ownership of 1,300 stores in the Shanghai, Jiangsu and Zhejiang provinces.

Starbucks is buying the East China stores from JV partners Uni-President Enterprises Corp 1216.TW (UPEC) and President Chain Store Corp 2912.TW (PCSC).

Additionally, Starbucks said it will sell its 50% interest in President Starbucks Coffee Taiwan Ltd.to UPEC and PCSC for approximately $175 million, giving the companies 100% ownership of Starbucks operations in Taiwan.

"One of things I think we've done very well is we've invested significantly ahead of the growth curve - in people, in systems", former Starbucks CEO Howard Schultz told CNN Money previous year.

"Unifying the Starbucks business under a full company-operated structure in China reinforces our commitment to the market and is a full demonstration of our confidence in the current local leadership team", Kevin Johnson, CEO of Starbucks, said in a statement.

Starbucks' sales in China been growing rapidly. The Taiwan JV operates about 410 Starbucks stores, which will now be entirely licensed.

Johnson called the two companies "highly-recognized local operators" and called the deal "a critical next step as we advance our multifaceted China growth strategy for long-term profitable growth in Asia". Shanghai has 600 locations - the largest number of Starbucks locations in any one city in the world. It will also be the first city outside the United States to have a coffee roastery and tasting room, set to open in December this year.

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