South Korea, GIC to buy a 32.5 percent stake in Starbucks Coffee

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On Monday (July 26), Starbucks Coffee Company announced that it would sell its entire 50 percent stake in its South Korean venture to local partner E-Mart and Singapore sovereign wealth fund GIC.
Shinsegae Group’s hypermarket chain unit E-Mart, which already owns 50% of Starbucks Coffee Korea, will buy another 17.5 percent, bringing its total ownership of Starbucks operations in South Korea to 67.5 percent. According to the company, E-Mart’s share will be worth 474 billion won (S$558.6 million).
Starbucks’ remaining 32.5 percent interest in Starbucks Coffee Korea will be acquired by a GIC subsidiary, though The purchase price was not disclosed.
The Korea Herald, on the other hand, claimed on Monday that GIC was considering paying 800 billion won for a 30% share. As part of GIC’s investment condition, the deal might include an initial public offering (IPO) within four or five years. Starbucks expects to conclude the divestiture agreement in its fifth-largest market over the next 90 days.
Since 1999, when Starbucks established its first location near Ewha Woman’s University in Seoul, E-Mart has been a joint venture partner in South Korea. Starbucks Coffee Korea has expanded to over 1,500 locations in 78 cities since then. Despite the Covid-19 epidemic, its income for 2020 increased by 3.2 percent to 1.93 trillion won.

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