UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 27, 2017
Starbucks Corporation
(Exact name of registrant as specified in its charter)
Washington | 0-20322 | 91-1325671 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2401 Utah Avenue South, Seattle, Washington 98134
(Address of principal executive offices) (Zip Code)
(206) 447-1575
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Selection 13(a) of the Exchange Act. ☐
Item 7.01 | Regulation FD Disclosure. |
Overview of the Transactions
On July 27, 2017, Starbucks Corporation (Starbucks or the Company) announced entry into a definitive agreement to acquire the remaining 50% share of its East China (East China JV) business from long-term joint venture partners, Uni-President Enterprises Corporation (UPEC) and President Chain Store Corporation (PCSC) for approximately $1.3 billion in cash consideration in the largest single acquisition in the Companys history. Starbucks will assume 100% ownership of approximately 1,300 Starbucks stores in Shanghai and Jiangsu and Zhejiang Provinces, building on the Companys ongoing investments in China, its fastest-growing and largest market outside of the United States in terms of store count.
Concurrently, UPEC and PCSC will acquire Starbucks 50% interest in President Starbucks Coffee Taiwan Limited (Taiwan JV) and assume 100% ownership of Starbucks operations in Taiwan for approximately $175 million. Founded in 1997, the Taiwan JV currently operates approximately 410 Starbucks stores in Taiwan.
Conditions to Completion of the Transactions
Both transactions are expected to close by early calendar year 2018 and are subject to customary closing conditions, including receipt of required regulatory approvals.
Starbucks will discuss the financial impact of these transactions during its third quarter fiscal year 2017 earnings conference call at 2:00 p.m. PT today, Thursday, July 27.
The information contained in this Current Report on Form 8-K is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that Section. The information contained in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Forward-Looking Statements
Certain statements contained herein are forward-looking statements within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as anticipate, expect, believe, could, estimate, feel, forecast, intend, may, plan, potential, project, should, will, would, and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are based on information available to Starbucks as of the date hereof, and Starbucks actual results or performance could differ materially from those stated or implied, due to risks and uncertainties associated with its business. These risks and uncertainties include, but are not limited to, the failure of the parties to consummate the transactions due to commercial, regulatory or other reasons, as well as general economic and industry factors such as coffee, dairy and other raw materials pricing and availability, successful execution of internal performance and expansion plans, fluctuations in U.S., Chinese and other international economies and currencies, the impact of initiatives by competitors, the effect of legal proceedings, and other risks detailed in the Companys filings with the Securities and Exchange Commission, including the Risk Factors section of the Companys Annual Report on Form 10-K for the fiscal year ended October 2, 2016. The Company assumes no obligation to update these forward-looking statements.
Item 9.01 | Financial Statements and Exhibits |
The following exhibit is furnished as a part of this report.
Exhibit No. |
Description | |
99.1 | Press Release dated July 27, 2017 announcing the Acquisition |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
STARBUCKS CORPORATION | ||||||
Dated: July 27, 2017 | By: | /s/ Sophie Hager Hume | ||||
Sophie Hager Hume | ||||||
vice president, assistant general counsel and assistant secretary |
Exhibit 99.1
Starbucks Acquires Remaining Shares of East China Business;
Move Accelerates Companys Long-term Commitment to China
Company announces agreements to acquire the remaining 50% of its East China JV and divest its 50% interest in its Taiwan JV; both transactions undertaken with long-term JV partners President Chain Store Corporation and Uni-President Enterprises Corporation
Investment reinforces 5,000 store commitment in Mainland China by 2021
SEATTLE; July 27, 2017 Starbucks Corporation (Nasdaq: SBUX) today announced entry into a definitive agreement to acquire the remaining 50% share of its East China (East China JV) business from long-term joint venture partners, Uni-President Enterprises Corporation (UPEC) and President Chain Store Corporation (PCSC) for approximately $1.3 billion in cash consideration in the largest single acquisition in the Companys history. Starbucks will assume 100% ownership of approximately 1,300 Starbucks stores in Shanghai and Jiangsu and Zhejiang Provinces, building on the Companys ongoing investments in China, its fastest- growing and largest market outside of the United States in terms of store count.
Concurrently, UPEC and PCSC will acquire Starbucks 50% interest in President Starbucks Coffee Taiwan Limited (Taiwan JV) and assume 100% ownership of Starbucks operations in Taiwan for approximately $175 million. Founded in 1997, the Taiwan JV currently operates approximately 410 Starbucks stores in Taiwan.
Unifying the Starbucks business under a full company-operated structure in China, reinforces our commitment to the market and is a firm demonstration of our confidence in the current local leadership team as we aim to grow from 2,800 to more than 5,000 stores by 2021, said Kevin Johnson, president and ceo, Starbucks Coffee Company. Similar to our decision in 2011 to fully license our Hong Kong and Macau market operations, we are pleased to transition our business in the Taiwan market to our long-time partners Uni-President Enterprises Corporation and President Chain Store Corporation, both highly-recognized local operators, as we continue to grow in Taiwan. This is a critical next-step as we advance our multifaceted China growth strategy for long-term profitable growth in Asia.
East China is a significant and strategic region for Starbucks in China, with Shanghai containing nearly 600 stores, the largest number of stores globally of any city where Starbucks has a presence. In December 2017, Shanghai will also be the first city outside of the United States to welcome the opening of the ultra-premium Starbucks Reserve Roastery.
This is the beginning of yet another exciting new chapter for Starbucks in China. Full ownership will give us the opportunity to fully leverage our robust business infrastructure to deliver an elevated coffee, in-store third place experience and digital innovation to our customers and further strengthen the career development opportunities for our people, said Belinda Wong, ceo, Starbucks China. Our East China partners relentless pursuit of operational excellence and leadership has provided us a solid foundation to maximize the unprecedented growth opportunities ahead and we look forward to extending our world-class network of unique programs to support their personal and professional dreams.
Weve had a strong friendship with Starbucks for nearly 20 years, starting with the opening of the first store in Taiwan and then further extending our partnership with the opening of the first store in East China said
Alex Lo, Chairman, Uni-President Enterprises Corporation. We are confident that our new ownership model and continued collaboration with Starbucks will enable us to be even more focused on delivering an elevated Starbucks Experience to our customers in the Taiwan market.
Starbucks will discuss the financial impact of these transactions during its third quarter fiscal year 2017 earnings conference call at 2:00 p.m. PT today, Thursday, July 27. Both transactions are expected to close by early calendar year 2018 and are subject to customary closing conditions, including receipt of required regulatory approvals.
About Starbucks Coffee Company
Since 1971, Starbucks has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with stores around the globe, the Company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.
About Uni-President Enterprises Corporation
Uni-President Enterprises Corp. was established in 1967 and listed in 1987. We are not only the biggest food and beverage manufacturing company in Taiwan but also have business in China and Southeast Asia. Besides, we also expand our business scope to retail and logistic field so that we could provide the safest and the best experience to consumers by building vertical integration. To know more details about our company, please visit us online at www.uni-president.com.tw.
About President Chain Store Corporation
Established in 1987 and listed on Taiwan Stock Exchange in 1997, President Chain Store Corp. (PCSC) is the largest convenience store operator in Taiwan, with over 5,100 7-ELEVEN stores at the end of 2016 and nearly 50% market share. PCSC has diversified into other retail businesses, such as restaurant, drugstore, department store, supermarket and online shopping. Our business operation areas include Taiwan, Mainland China, the Philippines and Japan. Uni-president, the largest food and beverage company in Taiwan, is PCSCs parent company with 45.4% ownership.
Forward-Looking Statements
Certain statements contained herein are forward-looking statements within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as anticipate, expect, believe, could, estimate, feel, forecast, intend, may, plan, potential, project, should, will, would, and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are based on information available to Starbucks as of the date hereof, and Starbucks actual results or performance could differ materially from those stated or implied, due to risks and uncertainties associated with its business. These risks and uncertainties include, but are not limited to, the failure of the parties to consummate the transactions due to commercial, regulatory or other reasons, as well as general economic and industry factors such as coffee, dairy and other raw materials pricing and availability, successful execution of internal performance and expansion plans, fluctuations in U.S., Chinese and other international economies and currencies, the impact of initiatives by competitors, the effect of legal proceedings, and other risks detailed in the Companys filings with the Securities and Exchange Commission, including the Risk Factors section of the Companys Annual Report on Form 10-K for the fiscal year ended October 2, 2016. The Company assumes no obligation to update these forward-looking statements.
Starbucks Corporation
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Investor Relations: Tom Shaw, 206-318-7118 investorrelations@starbucks.com |
Media: Marianne Duong, 206-318-7100 press@starbucks.com |