Vincent Tan’s Berjaya Food Bhd is buying out 50:50 joint venture partner Starbucks Coffee International Inc for the sum of US$88 million (RM279 million).
“Upon completion of the proposed acquisition, Berjaya Starbucks will become a 100% owned subsidiary of Berjaya Food, from a currently 50% jointly controlled entity,” the company said.
The deal between Berjaya Food and Starbucks International values the Malaysian operations of Starbucks at just over half a billion ringgit.
Starbucks was founded in the early 70s in Seattle and opened its first outlet in Malaysia in 1998. There are currently 173 Starbucks cafes throughout Malaysia. At least 14 are drive-thru outlets.
The joint venture, which has lasted 16 years, will be unwound and Berjaya Food will “have full control over the operation as well as the cashflow of Berjaya Starbucks.”
Berjaya Food intends to exert “greater control over Berjaya Starbuck’s future strategies and direction” in order to “capitalise on its growth potential.
Berjaya Starbucks made RM301.1 million in sales in the last financial year ended April 2014 and reported a pre-tax profit of RM49.8 million. Sales have been growing at double-digit rates for the past several years.
Starbucks outlets in Malaysia, like those worldwide, sell not just coffee but also a variety of pastries, confectionery and coffee-related accessories.