Starbucks has agreed to acquire the remaining stake of 50% in East China joint venture (East China JV) from Uni-President Enterprises Corporation (UPEC) and President Chain Store Corporation (PCSC).
Starbucks will pay $1.3bn in cash and will acquire the rights to operate about 1300 Starbucks stores across Shanghai and Jiangsu and Zhejiang Provinces.
The company will divest the 50% of its stake in its President Starbucks Coffee Taiwan Limited (Taiwan JV) to UPEC and PCSC for an amount of $175m. In Taiwan, Starbucks has around 410 stores.
The acquisition is part of the company’s strategy to increase the number of stores in China from the present 1300 to more than 5000 by 2021.
The East China region is of particular importance for Starbucks, as Shanghai alone has around 600 stores.
By this December, Starbucks said that Shanghai will be the first city outside of the US to open the ultra-premium Starbucks Reserve Roastery.
Starbucks China CEO Belinda Wong said: “This is the beginning of yet another exciting new chapter for Starbucks in 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.”
Uni-President Enterprises Corporation chairman Alex Lo said: “We’ve had a strong friendship with Starbucks for nearly 20 years, starting with the opening of the first store in Taiwan and then further extending our partnership with the opening of the first store in East China.
“We are confident that our new ownership model and continued collaboration with Starbucks will enable us to be even more focused on delivering an elevated Starbucks Experience to our customers in the Taiwan market.”
