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July 30, 2017updated 11 Nov 2021 12:00pm

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.

Starbucks has signed a $1.3bn agreement to take full ownership of 1,300 stores in China.

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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.

“Unifying the Starbucks business under a full company-operated structure in China reinforces our commitment to the market.”

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.

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.