Starbucks in $4B deal to sell 60% of its China operations
Starbucks is selling control of its second-largest business.
The coffee giant said it has entered into an agreement to form a joint venture with private equity firm Boyu Capital to operate Starbucks retail in China. The deal is valued at $4 billion.
Under the agreement, Boyu and Starbucks will operate a joint venture, with Boyu holding up to 60% interest and operating the nearly 8,000 Starbucks stores in China. Starbucks will retain a 40% interest in the joint venture and will continue to own and license the Starbucks brand and intellectual property to the new entity.
“This approach allows us to combine the strength of the Starbucks brand, our coffee expertise, the third place and our unique partner culture with Boyu’s deep knowledge of the China market and local expertise,” stated Brian Niccol, CEO, Starbucks.
Starbucks said it expects the value of its retail business in China to exceed $13 billion. The total includes the proceeds from the sale, the company’s remaining 40% stake and the expected value of licensing fees over the next decade.
The deal is expected to close in the second quarter of fiscal 2026, pending regulatory approval.
Starbucks has been under increasing financial pressure in China, where it sees the potential to operate as many as 20,000 locations nationwide. Rival Luckin Coffee, which opened its first U.S. locations in June, has gained market share with its lower prices and explosive growth. The company operates more than 20,000 stores across China.
Starbucks said its partnership with Boyu marks a new chapter in its over 26-year journey in China, combining the U.S. company’s globally recognized brand, coffee expertise, and partner (employee)-centered culture with Boyu’s depth of understanding of Chinese consumers
“Boyu’s deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions,” said Niccol. “We’ve found a partner who shares our commitment to a great partner experience and world-class customer service. Together we will write the next chapter of Starbucks' storied history in China.”
Founded in 2011, Boyu Capital is a leading alternative investment firm with Chinese roots. It has over 200 portfolio companies and offices in Hong Kong, Beijing, Shanghai and Singapore.
