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Starbucks to partner with Tata Group in India

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Starbucks chairman and CEO Howard Schultz is set to clinch a joint venture with Tata Group for opening coffee shops in India, almost nine months after he struck a sourcing deal with Tata Coffee, a unit of India’s largest private conglomerate and Asia’s largest coffee grower, said two sources directly aware of the matter.

Seattle-based Starbucks Coffee Company had held talks with other potential partners , like Jubilant Foodworks, before settling down with the Tatas for its ubiquitous cafe business in India, where there is a growing affinity for cappuccinos and lattes.

The $11-billion Starbucks is finalizing an exclusive equity joint venture with Tata Coffee which would also be backed by other bigger firms within Tata Group. The country’s foreign direct investment (FDI) regulations allow Starbucks to hold up to 51%. Tata shares may be routed through more than one group entity, including Tata Coffee, sources added.

The 58-year-old Schultz, who built an iconic coffee shop enterprise in his lifetime, wants involvement of bigger and more aggressive Tata firms in the joint venture operations , said one of the sources mentioned earlier. This could see group firms like Tata Global Beverages, parent of Tata Coffee, Indian Hotels Company , which runs Taj Hotels, and Infiniti Retail, a fully owned retail subsidiary of Tata Sons, being involved operationally. Starbucks could not be reached for immediate comments.

via Starbucks Coffee Company set for cafe joint venture with Tatas – The Economic Times.

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