U.S based company operating chain of coffeehouses and roaster reserves Starbucks Cooperation (SBUX) has announced its exit from a joint venture in South Korea which is approximately valued around $2 billion.
Satrbucks will be selling its stake in the joint venture to South Korea based largest online retailer E-Mart Inc. (KRX: 139480) and to Singapore based venture capital firm GIC.
According to the regulatory filing by Starbucks, E-Mart will be purchasing an additional 17.5% stake in Starbucks Coffee Korea for $411 million. Following this purchase, E-Mart will now own 65.7% of the joint venture.
On the other side, GIC will own the remaining 32.5% of the joint venture.
GIC is expected to pay $700 million for its stake, following closure of this transaction, the company will be sitting on a market valuation of $2.35 billion.
Starbucks says it expects to close the deal in the next 90 days. The company terms South Korea as its fifth-largest market.
“South Korea continues to be an important market for Starbucks. Part of our success in South Korea – and in many of our international markets – is due to our expertise and judgment in knowing when to rely on local partners to continue to build the business,” said Starbucks.