SEOUL • Starbucks Coffee Company will sell the entire 50 per cent stake it owns in its South Korean venture to local partner E-Mart and Singapore sovereign wealth fund GIC, the United States coffee chain said on Monday.
Retail giant Shinsegae Group's hypermarket chain unit E-Mart, which currently owns 50 per cent of Starbucks Coffee Korea, will acquire another 17.5 per cent interest, giving it 67.5 per cent ownership of Starbucks' operations in South Korea.
E-Mart said its additional stake will be worth 474 billion won (S$558 million).
An affiliate of GIC will acquire Starbucks' remaining 32.5 per cent stake in Starbucks Coffee Korea. The sale consideration was not given.
However, The Korea Herald reported earlier on Monday that GIC was considering paying some 800 billion won for a 30 per cent stake. It added that the deal might entail an initial public listing within four or five years as part of GIC's condition for investment.
Starbucks said the divestment deal is expected to be completed over the next 90 days.
E-Mart has been Starbucks' joint venture partner in South Korea since 1999, when the brand opened its first store near Ewha Womans University in Seoul.
Since then, Starbucks Coffee Korea has grown to more than 1,500 stores across 78 cities. Its revenue last year rose 3.2 per cent to 1.93 trillion won despite the pandemic.
"Starbucks Coffee Korea is a leading branded coffee chain with consistent and strong growth prospects due to its high brand awareness and continuous innovation," said Mr Choo Yong Cheen, GIC's chief investment officer for private equity.
"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.
"We are pleased to partner with E-Mart, an experienced and capable operator in the consumer retail space, to support the next chapter of this successful brand."
Earlier this week, GIC said it would invest US$240 million (S$326 million) in Arctic Green Energy to support the renewable energy firm's expansion in Asia and Europe.
The firm focuses on the decarbonisation of the building sector and has a geothermal partnership with China's state-owned China Petroleum and Chemical Corporation.
The funds would help Singapore-based Arctic Green Energy launch new projects and ramp up its capability in geothermal energy - a greener alternative to using fossil fuels for heating and cooling.
REUTERS
• With additional information from The Straits Times
