SEATTLE — Starbucks Corp. has reached agreement to acquire the remaining 50% share of its East China business from Uni-President Enterprises Corp. (UPEC) and President Chain Store Corp. (PCSC) for approximately $1.3 billion. The transaction marks the largest single acquisition in Starbucks’ history and gives the company 100% ownership of approximately 1,300 Starbucks stores in Shanghai and Jiangsu and Zhejiang Provinces.
|Kevin Johnson, president and c.e.o. of Starbucks Coffee Co.|
“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,” said Kevin Johnson, president and chief executive officer of Starbucks Coffee Co.
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. Founded in 1997, President Starbucks Coffee Taiwan Ltd. operates approximately 410 Starbucks locations in Taiwan.
“Similar to our decision in 2011 to fully license our Hong Kong and Macau market operations, we are pleased to transition our business in the Taiwan market to our longtime partners Uni-President Enterprises Corp. and President Chain Store Corp., both highly-recognized local operators, as we continue to grow in Taiwan,” Mr. Johnson said. “This is a critical next step as we advance our multifaceted China growth strategy for long-term profitable growth in Asia.”
Starbucks views East China as a “significant and strategic region,” with Shanghai containing nearly 600 stores, the largest number of stores globally of any city where Starbucks has a presence. In December, Shanghai is expected to become the first city outside of the United States to open a Starbucks Reserve Roastery.
“This is the beginning of yet another exciting new chapter for Starbucks in China,” said Belinda Wong, c.e.o. of Starbucks China. “Full ownership will give us the opportunity to fully leverage our robust business infrastructure to deliver an elevated coffee, in-store third place experience and digital innovation to our customers, and further strengthen the career development opportunities for our people. Our East China partners’ relentless pursuit of operational excellence and leadership has provided us a solid foundation to maximize the unprecedented growth opportunities ahead and we look forward to extending our world-class network of unique programs to support their personal and professional dreams.”Both transactions are expected to close by early calendar year 2018 and are subject to customary closing conditions, including receipt of required regulatory approvals.