Starbucks to take complete ownership of East China stores for $1.3bn
Starbucks has signed a $1.3bn agreement to take full ownership of 1,300 stores in China.
Under the terms of the agreement, the coffee chain will acquire the remaining 50% share of its East China business from joint venture partners Uni-President Enterprises (UPEC) and President Chain Store (PCSC).
The acquisition of the stores based in the provinces of Shanghai, Jiangsu and Zhejiang complements the company’s strategy to enhance the scale of its operations in China.
In terms of store count, China is the company’s fastest growing market outside the US.
Starbucks Coffee Company president and CEO Kevin Johnson said: “Unifying the Starbucks business under a full company-operated structure in China reinforces our commitment to the market and is a firm demonstration of our confidence in the current local leadership team as we aim to grow from 2,800 to more than 5,000 stores by 2021.”
In addition, Starbucks has agreed to offer its 50% interest in President Starbucks Coffee Taiwan to UPEC and PCSC for $175m.
Following the deal, UPEC and PCSC will wholly own Starbucks operations in Taiwan.
According to Starbucks, the transaction in connection with its Taiwan business will enable further growth in the country.
There are around 600 Starbucks stores in Shanghai, with the Starbucks Reserve Roastery set to open in December.
Both transactions are expected to be completed next year subject to customary closing conditions, including receipt of required regulatory approvals.
Image: Starbucks intends to expand its operations in China to more than 5,000 stores by 2021. Photo: courtesy of Starbucks Corporation.