Starbucks’ $1.3B China Deal Is Its Biggest Acquisition Ever
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Starbucks Corporation (NASDAQ:SBUX) is planning to acquire the rest of its East China business for $1.3 billion.
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The deal will have Starbucks paying long-term joint venture partners Uni-President Enterprises Corporation and President Chain Store Corporation $1.3 billion for its East China business. These two companies own 50% of that business, while SBUX owns the rest.
Starbucks’ plans to buy the rest of its East China business will be the largest acquisition ever for the coffee chain. The deal will bring all 1,300 of its locations in Shanghai, as well as the Jiangsu and Zhejiang Provinces, 100% under its control.
“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,” Belinda Wong, CEO of Starbucks China, said in a statement.
At the same time that SBUX buys the rest of its East China business, it will also be selling its 50% stake in President Starbucks Coffee Taiwan Limited. This sale will be to, Uni-President Enterprises Corporation and President Chain Store Corporation. The deal will give SBUX 100% control of the business.
Starbucks will be selling the rest of its share in President Starbucks Coffee Taiwan Limited for $175 million. The business controls 410 of the company’s stores in Taiwan. It got its start back in 1997.
Starbucks is expecting both of the transactions to reach completion in early 2018. The deals will need to complete customary closing conditions and get approval from regulators before they can close. SBUX also plans to reveal more financial details about these deals in its fiscal third quarter of 2017.
SBUX stock was up 1% as of Thursday morning.
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As of this writing, William White did not hold a position in any of the aforementioned securities.
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