Shares of Taiwan firms fall on sale of China Starbucks business

Shares of Taiwan’s Uni-President Enterprises Corp and President Chain Store tumbled in Taiwan for two straight days after they said they were selling their combined 50-per cent stake in the China Starbucks venture, which would grant the US coffee chain giant full ownership of the lucrative mainland business.

Uni-President dropped more than 1 per cent to NT$57.80 (HK$15) on the Taiwan bourse on Monday, while President Chain Store fell 3.8 per cent to NT$256 (HK$66.20).

Starbucks said it would pay US$1.33 billion for the remaining stake in Shanghai Starbucks Coffee Corp, which operates about 1,300 stores in the fast-growing eastern region of Shanghai, Jiangsu and Zhejiang provinces.

The deal is Starbucks’ single biggest acquisition, which underscored the importance of the Chinese market to the Seattle-based coffee chain.

By exiting Shanghai Starbucks Coffee, Uni-President could loose up to NT$4.13 billion in earnings, or five times of its Taiwan Starbucks’ earnings, according to Taiwan’s Central News Agency , citing the company’s 2016 annual results.