Back to top

Starbucks (SBUX) Buys China JV Stake for $1.3 Billion, Shares Lift

Read MoreHide Full Article

On Thursday, global coffee giant Starbucks Corp. (SBUX - Free Report) announced that it will purchase the remaining 50% stake in its East China joint venture for about $1.3 billion, marking the company’s biggest ever acquisition.

Starbucks is purchasing its remaining share from its long time joint venture partners Uni-President Enterprises and President Chain Store. And in a separate deal, the coffee company will sell its 50% stake in its Taiwanese joint venture to Uni-President and President Chain for roughly $175 million; the Taiwan joint venture operates about 410 Starbucks store locations.

If you take into account number of stores, China is Starbucks’ fastest-growing market outside of the United States. The city of Shanghai, for instance, has almost 600 Starbucks outlets, the largest number in any city, notes Reuters. It will also be the first city beyond the U.S. to have a coffee roastery and tasting, which will open this December.

The company said the deal will give them 100% ownership of 1,300 Starbucks stores in the Shanghai, Jiangsu, and Zhejiang Provinces, though Starbucks is still committed to operating over 5,000 stores in Mainland China by 2021.

"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," said Belinda Wong, chief executive, Starbucks China, in a statement. 

Both deals are expected to close by early next year. Starbucks will offer more updates on the deal’s impact on future earnings during its third quarter call with analysts later today.

More Stock News: Tech Opportunity Worth $386 Billion in 2017

From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.

Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>

Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Starbucks Corporation (SBUX) - free report >>

More from Zacks Stocks in the News

You May Like