Starbucks is buying out Japanese partner

Global coffee company and coffeehouse chain Starbucks Corporation announced on Wednesday that it is buying out its Japanese partner Starbucks Coffee Japan, Ltd in a deal worth $914 million.

Starbucks already owns 39.5% of Starbucks Japan. It will buy the remaining 60.5% from Sazaby League, with which it has had a joint venture since 1995.

Sazaby approached Starbucks during the summer about selling its Starbucks Japan stake.

The transaction is planned for completion at the end of 2014.

Some of Starbuck’s most profitable cafes are in Japan, its second largest market in terms of sales.

Starbucks Coffee Company President and CEO, Howard Schultz, said:

“Nearly 20 years ago we opened the first Starbucks store outside of North America in Tokyo’s Ginza district with lines around the block. Japan is a market we know well and care deeply about, with more than 25,000 partners serving millions of customers every week at more than 1,000 stores.”

“Full ownership of Starbucks Japan enables us to build on the amazing foundation of customer trust and loyalty our partners have achieved by continuing to take care of our people, delivering the highest quality coffee and innovating in product, store design and the digital experience.”

Expansion planned

By gaining full ownership of its Japanese operations, Starbucks will be able to expand through grocery stores and other outlets.

Even though it posts high sales in the country, Starbucks has a relatively small share of Japan’s ready-to-drink market.

Starbucks has a total of 1,050 cafes across Japan. Profit margins are among the highest of all its regions.

John Culver, group president China/ Asia Pacific, Channel Development and Emerging Brands, said:

“We would like to thank all of our partners in Japan who wear the green apron with pride and deliver the Starbucks Experience to our customers each and every day. Their efforts have built an admired brand and delivered the strong financial results that have made Starbucks Japan a meaningful contributor to the growth and profitability in our China/ Asia Pacific segment.”