Whitbread PLC (LON:WTB) has bought out its Costa Coffee joint venture (JV) partner in South China for roughly £35mln.
The company paid 310mln renminbi to buy out Yueda’s 49% stake in the JV, which currently operates 252 Costa Coffee outlets in the south of China, including 93 stores in Shanghai.
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"One of our three key strategic priorities is to focus on our strengths to grow internationally and today's announcement marks a significant and exciting step in our ambitious growth plans for China.
"We have enjoyed an excellent partnership with Yueda over the past ten years together beginning to build the Costa brand in this key market,” said Alison Brittain, chief executive officer of Whitbread, in a statement.
"The coffee shop market in China is highly attractive, with a compelling opportunity for Costa to grow its presence over the longer term. This acquisition gives us full strategic and funding flexibility to unlock Costa's potential in China, providing a strong platform to facilitate future growth, enhance the customer experience and make Costa the coffee shop of choice in this fast-growing market,” she added.
Shares in Whitbread rose 1.32% to 3,902p in afternoon trading.