8-KAcquisitions & DispositionsRegulation FD

STARBUCKS CORP 8-K Report, Acquisition Completed (Jan 3, 2018)

Filed January 3, 2018For Securities:SBUX

Summary

Starbucks Corporation has completed a significant strategic move by acquiring the remaining 50% stake in its East China joint venture for approximately $1.4 billion. This transaction, finalized on December 31, 2017, grants Starbucks full 100% ownership of over 1,400 stores in key regions including Shanghai and the Jiangsu and Zhejiang Provinces. This move consolidates Starbucks' control over its rapidly growing China market, increasing its total company-owned stores in China to over 3,100 and positioning the company for accelerated growth and strategic execution in this crucial market. Concurrently, Starbucks divested its 50% interest in its Taiwan joint venture for approximately $175 million. This divestiture, also completed on December 31, 2017, transfers full ownership of Starbucks' operations in Taiwan, comprising around 420 stores, to its long-term partners, Uni-President Enterprises Corporation and President Chain Store Corporation. While this represents a strategic shift in its Asia-Pacific presence, the primary focus remains on the substantial expansion and integration of its wholly-owned East China operations.

Key Highlights

  • 1Starbucks acquired the remaining 50% of its East China joint venture for approximately $1.4 billion.
  • 2This acquisition grants Starbucks 100% ownership of over 1,400 stores in Shanghai, Jiangsu, and Zhejiang Provinces.
  • 3The total number of company-owned stores in China now exceeds 3,100.
  • 4The company divested its 50% stake in the Taiwan joint venture for approximately $175 million.
  • 5Starbucks' operations in Taiwan, including approximately 420 stores, will now be wholly-owned by its former partners.
  • 6These transactions were completed on December 31, 2017.

Frequently Asked Questions

Starbucks acquired the remaining 50% of its East China joint venture to gain full 100% ownership and control over its operations in a key growth market. This allows for more direct strategic execution, accelerated expansion, and simplified management in a region with over 1,400 stores.

Starbucks paid approximately $1.4 billion in cash for the East China acquisition and received approximately $175 million from the sale of its Taiwan interest. The net cash outflow is approximately $1.225 billion. This strategic move prioritizes investment in the high-growth China market.

The acquisition of the East China JV signifies a strong commitment and increased focus on expanding Starbucks' wholly-owned operations within mainland China, a critical market for the company. The divestiture of the Taiwan JV represents a strategic repositioning, simplifying Starbucks' operational footprint in the broader Asia-Pacific region while concentrating resources on its core China strategy.

Both the acquisition of the East China joint venture and the disposition of the Taiwan joint venture were completed on December 31, 2017.