The world's biggest coffee chain operator Starbucks (NSDK: SBUX) has bought a 90 percent stake in Beijing Mei Da Coffee Company Ltd., its authorized developer in north China, in an effort to speed up expansion in the country.
The US-based coffee chain acquired High Grown Investment Group (Hong Kong), Beijing Mei Da's major shareholder, from H&Q Asia Pacific, a private equity firm, on Tuesday.
Both sides declined to reveal the financial terms of the deal. The remaining 10 percent stake in Beijing Mei Da will continue to be held by Beijing Sanyuan Company.
Beijing Mei Da currently has more than 60 Starbucks retail outlets in Beijing and neighboring Tianjin Municipality.
"The deal will help Starbucks integrate the local market, and will boost business ahead of the 2008 Olympic Games." said Wang Jinlong, president of Starbucks Greater China.
This is the third time the Seattle-based coffee chain giant has increased its equity stake in a local joint venture.
In 2003, Starbucks reportedly paid US$21.3 million to raise its stake in Shanghai Uni-President Starbucks Coffee Ltd. from 5 percent to 50 percent, and later bought the remaining 50 percent.
Another deal involved Guangdong Maximum Starbucks Coffee, according to Shanghai Securities News Wednesday.
Citing Starbucks chairman Howard Schultz, the newspaper said apart from raising its stake in other local joint ventures, the company plans to open at least 100 solely-owned retail outlets in China's small and medium-sized cities.
Starbucks plans to open 20,000 new stores worldwide, half of which will be in the Asia-Pacific region.
Starbucks had 90 stores in 19 cities on the Chinese mainland by October 1. It opened its first store in 1999.
(Xinhua News Agency October 26, 2006)