Starbucks withdraws from South Korean joint venture and sells shares to E-Mart and GIC Reuters

© Reuters. File photo: On March 7, 2016, a Starbucks logo was seen at a Starbucks coffee shop in Seoul, South Korea. REUTERS/Kim Hong-Ji

(Reuters)-Starbucks said on Monday that it will withdraw from any direct ownership in South Korea, its fifth largest market, and sell its 50% stake in the joint venture to its local partner E-Mart Inc and Singapore’s sovereign wealth fund GIC.

E-Mart, which currently owns 50% of Starbucks (NASDAQ:) Coffee Korea, said it will acquire an additional 17.5% of the shares, valued at 474 billion won ($411.8 million).

Reuters calculations show that this also shows that Starbucks Coffee Korea is valued at US$2.35 billion.

Starbucks said that GIC will own the remaining 32.5% of the joint venture.

This American coffee chain operates more than 1,500 stores in 78 cities in South Korea. Despite the COVID-19 pandemic, revenue in 2020 has increased by 3.2% to 1.93 trillion won.

Choo Yong Cheen, Chief Investment Officer of GIC Private Equity, said: “As a long-term investor, GIC believes that Starbucks Coffee Korea will play an important role in leading the retail coffee trend and further promoting industry growth.”

Starbucks said the transaction is expected to be completed within the next 90 days.

(1 USD = 1,150.5800 KRW)

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