Starbucks Corp is ending its joint venture in South Korea that worth at $2 billion. The coffee chain will be selling its stakes to local partner E-Mart Inc and Singapore sovereign wealth fund GIC.
E-Mart Inc is one of the largest retailers in South Korea. According to Reuters, the company owns over 160 stores and is the owner of half of the joint venture.
In relation to Starbucks’ exit from South Korea’s JV, E-Mart will purchase an additional 17.5% stake in Starbucks Coffee Korea, the company said in a filing on Tuesday. This worth for around $411 million. Additionally, E-Mart will keep on operating the Starbucks stores.
Additionally, Starbucks Coffee Korea will still be tied in a licensing agreement with Starbucks. A Shinsegae spokesperson explained that the joint venture agreement has always been between Starbucks and Shinsegae Group.
On the other hand, GIC will hold the remaining 32.5% stake in Starbucks Coffee Korea. The digit translates into a $2.35 billion valuation for the entire business. According to Reuters‘ calculation, GIC will pay for over $700 million for its stake. GIC, though, refused to reveal the deal value.
Starbucks is reporting its third-quarter result on Tuesday. The coffee chain looks to complete the deal over the next 90 days.