Starbucks (SBUX), the world’s most ubiquitous and recognizable coffee chain, is strengthening its grip in Japan.
The $55 billion roaster, marketer and retailer already has a presence in 62 countries — including Japan. However, Starbucks announced on Tuesday that it will buy out the remaining 60.5% of Starbucks Coffee Japan that it didn’t own, which will help SBUX increases its proverbial piece of the Japanese pie overnight.
According to the press release:
“Starbucks Corporation (Nasdaq: SBUX) today announced that it will acquire the remaining 60.5% share of Starbucks Coffee Japan, Ltd. (Starbucks Japan) that the company currently does not own through a two-step tender offer process, further elevating Starbucks growth and innovation in its second-largest market when measured by retail store sales. The acquisition positions Starbucks to accelerate growth across multiple channels in Japan, including the potential introduction of new concepts, such as Teavana.”
The cost of the transaction will total just more than $900 million, with $505 million going to a buyout of partner Sazaby League, and $408.5 million to public shareholders.
Starbucks bought Teavana back in 2012, and has heavily invested in it since then to spur growth into the tea arena and maintain a firm grasp on its niche in the beverage market.
As for SBUX stock … well, the move isn’t big enough to shove the needle in one direction or the other, but still, full control of Starbucks Japan should be a net positive:
“Before the end of the first quarter of fiscal year 2015, Starbucks expects to have a controlling interest and will consolidate Starbucks Japan into the company’s results. Starbucks expects this transaction will be immediately accretive on a non-GAAP basis when excluding certain items noted later in this release.”
India’s Economic Times also reported early this morning that another foreign joint venture the coffee behemoth is involved in, Tata Starbucks, is planning on opening new mini-locations in India about half the size of the average 2,500-square-foot location.
Last quarter, SBUX saw 7% same-store sales growth in the China/Asia Pacific region, which was higher than both the Americas and EMEA (Europe, Middle East and Africa) geographic divisions.
Starbucks is sending investors a clear message with these latest moves, affirming the company’s commitment to continuing its overseas growth.
As of this writing John Divine held no positions in any of the stocks mentioned.
