Business Intelligence on Retailing, Franchising, and Consumerism in China

Starbucks Gains Majority Ownership Of Beijing, Tianjin Operations

Starbucks has acquired from H&Q Asia Pacific and other shareholders ownership of High Grown Investment Group Limited, which in turn is the controlling shareholder of Beijing Mei Da Coffee Company, the operator of over 60 Starbucks retail stores in Beijing and Tianjin and an authorized licensee of Starbucks Coffee International.

The financial terms of this transaction were not disclosed. Beijing Sanyuan Company continues to be a minority shareholder of Mei Da.

As controlling shareholder of Beijing Mei Da Coffee, H&Q Asia Pacific, a leading private equity firm that invests throughout the Asia Pacific region, was instrumental in bringing Starbucks Coffee to China, opening the first Starbucks store in China in 1999.

H&Q Asia Pacific, along with a handful of investment partners, helped successfully expand Starbucks presence from a single store in 1999 to more than 60 stores in Beijing and Tianjin at the end of August.

"We are very excited about the significant increase of equity ownership in these markets, which we believe demonstrates our commitment to China, and which we believe will permit us to achieve greater operational efficiencies, accelerate our expansion in China, and contribute to the leisure environment within Beijing and Tianjin," said Jinlong Wang, president, Starbucks Greater China. "Additionally, this transaction allows Starbucks to be more integrated into the communities by building on the strong human connections that Beijing Mei Da Coffee helped us establish in this market with our local partners (employees) and customers. We are now poised to expand rapidly in this important region two years before the 2008 Beijing Olympics."

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