H&Q Asia Pacific exits Starbucks China

H&Q Asia Pacific is selling its controlling stake in the local operator of more than 60 Starbucks retail stores in Beijing and Tianjing for an undisclosed amount to Starbucks, the giant US coffee retailer.

H&Q Asia Pacific has sold an 85 percent stake in Beijing Mei Da Coffee, the operator of over 60 Starbucks outlets in Beijing and Tianjin, to Starbucks Corporation for an undisclosed amount, Ta-lin Hsu, founder and chairman of H&Q Asia Pacific said.

Mei Da is also an authorized licensee of Starbucks Coffee International.

Starbucks acquired a controlling stake in the Chinese coffee retail operator from H&Q and a number individual shareholders in High Grown Investment Group, which in turn controls 90 percent of Beijing Mei Da Coffee.

Following the above transaction, Beijing San Yuan, a minority shareholder, will still retain a 10 percent stake in the Mei Da.

H&Q brought Starbucks Coffee to China, where the first retail store opened in 1999, in the days before China became a member of World Trade Organization. As such, H&Q had to team up with local partner Beijing San Yuan Company, which owns a 50 percent stake in the operating company of MacDonalds outlets in Beijing.
Together with its partners which include David Sun – a legend in Taiwan after he brought MacDonalds to the country 20 years ago – H&Q helped to expand Starbucks network in China to more than 60 outlets as of end August this year, Hsu said.

Consumer tops the type of sector H&Q intends to invest into, particularly in China, according to Hsu.

Jinlong Wang, president of Starbucks Greater China said: “We are now poised to expand rapidly in this important region two years before the 2008 Beijing Olympics.”

This deal represents H&Q Asia Pacific’s second exit in three months from a popular US consumer/retail brand name. In August, the private equity firm which was founded as a joint-venture with Hambrecht & Quist Group in 1985, divested its interest in MTV Japan, an investment it made in 2000-2001, to MTV Network.