Starbucks is selling a 60% stake in its China business to private equity firm Boyu Capital, based on a cash-free, debt-free enterprise value of around $4 billion. The deal, which includes Starbucks’ retained stake and future licensing income, is expected to close in 2026 pending regulatory approval.
Starbucks will continue to own and license its brand and IP to the new joint venture. Headquartered in Shanghai, the venture will continue to operate the 8,000 stores, with a long-term goal of reaching 20,000. It is currently Starbucks' biggest territory outside the US.
The coffee chain has come under mounting pressure from homegrown rivals such as Luckin Coffee, which has overtaken it in store count by offering lower prices and aggressive discounts. Starbucks has responded by cutting prices in China, a move that helped retention but weighed on profits.
Campaign Asia-Pacific first reported in July that Starbucks was fielding strong investor interest for a potential stake sale in China. At the time, the Seattle-based chain denied talk of a full exit but confirmed it was exploring “strategic options” to support future growth.
“We see significant long-term potential in China and are evaluating the best ways to capture the future growth opportunities. We are looking for a strategic partner with like-minded values who shares our vision to provide a premium coffeehouse experience,” a spokesperson told Campaign Asia-Pacific, adding that Starbucks aimed to retain a “meaningful stake” and that “any deal must make sense for Starbucks' business and partners.”
Starbucks said the tie-up combines its “globally recognised brand, coffee expertise, and partner-centred culture” with Boyu’s knowledge of Chinese consumer behaviour. The firm also plans to introduce new beverages and digital platforms tailored to the market.
The agreement is one of the largest involving the China arm of a global consumer brand in recent years. Other multinationals have restructured or exited operations in the market, including Yum! Brands, which spun off KFC and Pizza Hut China in 2016, as well as Gap and Uber have struggled to gain traction.
Starbucks’ China sales have been hit by the pandemic, slower discretionary spending and intensifying competition. Newly appointed chief executive Brian Niccol, who joined from Chipotle last year, has been driving a turnaround focused on menu innovation, hiring more baristas and scaling back automation.
Starbucks currently operates more than 40,000 stores worldwide. Its fourth-quarter earnings stood at $133.1 million, and revenue at $9.57 billion.
