Retail giant E-Mart Inc has finalised its majority acquisition of Starbucks’ South Korean business, filing to change the name of Starbucks Coffee Korea to SCK Company
Starbucks' Famille Park Store in Seoul, South Korea | Photo credit: Starbucks Coffee Company
E-mart now controls a 67.5% stake in the coffee chain’s South Korean business, having added an additional 17.5% stake to its existing 50% share at a reported cost of $411m.
The remaining 32.5% stake of the coffee chain has been purchased by Singapore sovereign wealth fund, GIC, marking an end to Starbucks’ global business arm, Starbucks Coffee International, having direct involvement in Starbucks Korea – the 50-50 joint venture originally founded with E-mart in 1997.
SCK Company will, however, continue to pay royalties in the region of 5% to Starbucks Coffee International.
“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,” commented E-Mart Executive Vice President, TJ Hyung, when the deal was first announced last year.
E-Mart’s financial reports show the retail group achieved net sales of KRW 18.1trn ($15.1bn) in the first nine months of 2021. Meanwhile, Starbucks achieved net sales of KRW 1.7trn ($1.4bn) with profits of KRW 182bn ($152m) during the period, up from KRW 1.4trn and KRW 129bn respectively compared to the same period in 2020
As of the third quarter of 2021, Starbucks operated 1,611 stores in South Korea, up from 1,508 at the end of 2020.