Starbucks Takes Full Ownership of East China Business -- Update
July 27 2017 - 8:58AM
Dow Jones News
By Imani Moise
Starbucks Corp. said Thursday that it will become the full owner
of its East China joint venture in a bid to expand its presence in
Asia.
The coffee chain will pay roughly $1.3 billion in cash to buy
the 50% stake in the joint venture that it doesn't already own from
Taiwan's Uni-President Enterprises Corp. and President Chain Store
Corp. At that price, the deal is the largest acquisition in the
company's history.
When the deal is closed, Starbucks will operate 1,300 stores in
Shanghai as well as Jiangsu and Zhejiang provinces in China. The
company has previously said it plans to operate 5,000 stores in
China, its fastest-growing international market, by 2021.
"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," said Starbucks chief executive Kevin Johnson.
Starbucks has been looking outside the U.S. for growth after
slowing sales at home hammered its stock last year. Mr. Johnson
said in an interview earlier this year that China will likely
overtake the U.S. as the company's largest market in the next 10 or
15 years.
At the end of last year, Starbucks had 1,811 company-operated
and licensed stores in China.
Taiwan-based Uni-President Enterprises and President Chain Store
will also buy Starbucks's 50% stake in President Starbucks Coffee
Taiwan Ltd, which operates 410 coffee shops in Taiwan, for $175
million.
Starbucks shares edged up 0.1% to $58.00 premarket and have
risen 4.4% so far this year.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
July 27, 2017 08:43 ET (12:43 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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