(Yicai Global) July 28 -- US coffee chain Starbucks will acquire the remaining 50 percent stake in its East China business from its long-term partners Uni-President Enterprises Corp. [TW:1216] and President Chain Store Corp. [TW:2912] for USD1.3 billion in cash.
This is the largest acquisition deal in Starbucks history.
After the deal concludes, the company will wholly-own nearly 1,300 Starbucks stores located in Shanghai, and Jiangsu and Zhejiang provinces in East China, to achieve comprehensive direct operation of its businesses in mainland China, detailed transaction information Starbucks outed shows. East China is a key market for Starbucks China, which has nearly 600 Shanghai stores, the most of any city in the world. Starbucks announced plans in October to expand to 5,000 stores in China over the next five years. At that time, the industry held that implementing the plan would be very difficult. The deal means that Starbucks will not only control all its stores in East China, but it will also lower the bar for Starbucks to expand.
As large food producer, Uni-President has experienced poor performance in recent years. Before the sale of its Starbucks East China business it sold all its shares in JinMaiLang Beverage Corp. and Jianlibao Group Co. Even though Starbucks is a real feather in Uni-President's cap, it may have had to sell it at this juncture to ease its performance pressure.