News

Starbucks spending $1.3B on China

August 2, 2017

Starbucks is spending $1.3 billion to take control over all its units in China.

The chain inked a deal this week to acquire the remaining 50 percent share of its East China business from long-term joint venture partners, Uni-President Enterprises Corporation and President Chain Store Corporation — the largest single acquisition in the company’s history, according to a company press release.

Starbucks will assume 100 percent ownership of the 1,300 Starbucks stores in Shanghai and Jiangsu and Zhejiang Provinces, building on the company’s ongoing investments in China, its fastest-growing market outside of the United States in terms of store count.

Concurrently, UPEC and PCSC will acquire Starbucks 50 percent interest in President Starbucks Coffee Taiwan Limited and assume 100 percent ownership of Starbucks operations in Taiwan for approximately $175 million. Founded in 1997, the Taiwan JV operates approximately 410 Starbucks stores in Taiwan.

"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 CEO, Starbucks Coffee Company, in the release.

East China is a significant and strategic region for Starbucks in China, with Shanghai containing nearly 600 stores, the largest number of stores globally of any city where Starbucks has a presence. In December 2017, Shanghai will also be the first city outside of the United States to welcome the opening of the ultra-premium Starbucks Reserve Roastery. 

"This is the beginning of yet another exciting new chapter for Starbucks in China," said Belinda Wong, CEO 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."