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Emart’s acquisition of Starbucks Korea

2021-09-01

On July 27, 2021, E-Mart Inc., (“E-Mart”) and Apfin Investment Pte Ltd. (“GIC”) each entered into a Share Purchase Agreement with Starbucks Coffee International, Inc. (“Starbucks”) to purchase a total amounting to a 50% of the stakeholder interest in Starbucks Coffee Korea Co., Ltd. (“SCK”). The transaction involved a purchase of 17.5% and 32.5% shareholding interest in SCK by E-Mart and SCK respectively which, upon closing thereof, will result in E-Mart holding a total of 67.5% shareholding interest in SCK. The closing of this transaction is expected to take place in September 2021 upon a completion of merger filing by GIC. Certain agreements including a Shareholders Agreement by and between E-Mart and GIC and an Area Development and Operating Agreement (“License Agreement”) between SCK and Starbucks will be executed on or prior to the closing of the transaction.

 

In 2000, E-Mart and Starbucks set up a Joint Venture in which each party held 50% of equity interest and in 2020, SCK’s annual sales in Korea reached KRW 2 trillion which earned its position as the 5th largest market in global sales following United States, China, Canada and Japan. Whereas Starbucks operates its businesses in China, Japan and other countries through its wholly owned subsidiary by purchasing out interest of its partners, Starbucks decided to undertake this transaction by delegating management of the Korean market to E-Mart, its exceptional local partner. By consummating this transaction, it is anticipated that E-Mart will take a more proactive role by spearheading several projects which will significantly add to the corporate value of SCK.

 

In particular, this deal was a complex cross-border M&A transaction that required detailed and strategic coordination of interests of all of the related parties (E-Mart, Starbucks, GIC and SCK) as well as the negotiation of key contractual terms which can both be attributed to the successful execution and closing of the transaction.

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