GIC to acquire stake in Starbucks Coffee Korea

Starbucks Coffee outlet at Suntec Mall in Singapore. Photo taken pre-CovidStarbucks Coffee outlet at Suntec Mall in Singapore. Photo taken pre-Covid

Singapore’s sovereign wealth fund GIC will acquire a 32.5 percent stake in Starbucks Coffee Korea from Nasdaq-listed Starbucks Coffee, the company said in a statement Monday.

In addition, Starbucks’ joint venture partner in South Korea, E-Mart (Shinsegae Group) will acquire an additional 17.5 percent interest in the joint venture, bringing its ownership stake to 67.5 percent, the statement said. E-Mart, South Korea’s largest retailer, has been Starbucks’ joint venture partner in the country since 1999, when the first store there was opened in Seoul.

E-Mart will pay US$411 million for the additional stake, Reuters reported, citing a market filing in South Korea, and estimated GIC would pay more than US$700 million for its stake.

“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 vice president of E-Mart, in the statement. “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.”

Choo Yong Cheen, GIC’s chief investment officer of private equity, said Starbucks Coffee Korea has “consistent and strong growth prospects.”

“As a long-term investor, GIC is confident that Starbucks Coffee Korea will play an important role in setting retail coffee trends and further driving industry growth in South Korea,” Choo said.

The deal is expected to be completed over the next 90 days, the statement said.