Starbucks US has confirmed it will sell its half share of the Starbucks South Korea business to its existing local partner and a Singapore investor.
Shinsegae subsidiary, E-Mart will buy 17.5 per cent of the business, giving it 67.5 per cent of the Starbucks South Korea entity. Starbucks US says the remaining 32.5-per-cent stake will be acquired by Singapore sovereign investment fund GIC.
The deal was reported by Inside Retail Asia in late May but it has taken until now for an official announcement to emerge.
“As Starbucks’ fifth largest market, South Korea continues to be important for Starbucks,” said Michael Conway, group president of international and channel development.
The value of the two deals has not yet been disclosed. However, Starbucks South Korea is estimated to value at more than US$2 billion after the deals. The sale is expected to be completed during the next 90 days.
“Starbucks and E-Mart have had many conversations on how we can continue to grow the Starbucks brand in the market, which led to this decision,” said T J Hyung, executive VP of E-Mart. “This transaction is the result of the strong performance and partnership we have achieved together over the past 20 years.
“E-Mart will continue to enhance the customer experience and social value that Starbucks has been creating, with a new partner GIC as well as Starbucks,” he said.
Partnering with Starbucks since 1999, E-Mart has contributed to the coffee chain’s growth across South Korea, with more than 1500 stores in 78 cities.
Meanwhile, Starbucks has also partnered with Nestle to bring Starbucks ready-to-drink coffee beverages to Southeast Asia. The partnership will see the launch of its most popular RTD products, such as Starbucks Frappuccino and Starbucks Doubleshot.