DFI Retail to take over Starbucks business in Asia from Maxim’s Caterers

[SINGAPORE] DFI Retail Group announced that it has entered into a conditional sale and purchase agreement with Maxim’s Caterers for its Starbucks-licensed business on Wednesday (Sep 30).

As part of the agreement, DFI will assume all of Maxim’s existing interests in the Starbucks-licensed business, which comprises a network of more than 1,100 coffee houses in Thailand, Hong Kong, Singapore, Vietnam, Cambodia, Macau and Laos.

DFI indirectly holds a 50 per cent stake in Maxim’s, which will be bought back by the F&B group. The consideration for the share repurchase will be the equity interest in the Starbucks-licensed business, in addition to a cash consideration of about US$340 million.

DFI said that the transaction will give it “full operational control across all business segments”. The Starbucks-licensed business will also “be immediately revenue and operating margin accretive to the group’s core retail business”.

In 2025, the Starbucks-licensed business reported revenue of US$750 million with an underlying operating margin of 7 per cent. Revenue rose at a cumulative annual growth rate (CAGR) of 3.5 per cent from 2023 to 2025.

The business is expected to contribute between US$600 million and US$650 million to DFI’s total subsidiaries’ revenue from April to December 2027, and about US$900 million in 2028.

It is projected to deliver a 6 to 7 per cent revenue CAGR from 2026 to 2029 as the coffee house footprint grows to at least 1,350 locations.

The Starbucks-licensed business is also forecast to hit a midterm operating margin of 8 to 9 per cent.

The transaction is expected to strengthen DFI’s balance sheet with the US$340 million cash consideration. This, the group said, will provide it with capital to pursue other opportunities for mergers and acquisitions to grow its top line or return excess capital to shareholders.

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DFI had announced an increase in its dividend payout ratio to 80 per cent in 2027, and will deploy recycled capital towards higher-return growth investments in line with its capital allocation framework.

With this transaction, DFI will tap “structural tailwinds” such as Asia’s rising middle class with disposable incomes. “Per capita coffee consumption and coffee house penetration in key emerging markets remain below regional and global peers,” it noted, adding that this presents a “substantial runway for growth”.

The transaction is subject to regulatory approvals and completion of the internal separation of the Starbucks-licensed business from Maxim’s businesses.

Should the conditions not be satisfied or waived by Mar 31, 2027, the long-stop date will be automatically extended to Jun 30, 2027, if neither party opts to terminate the agreement.

Shares of DFI fell 1.5 per cent or US$0.05 to close at US$3.19 on Wednesday, before the deal was announced.