Starbucks sells US$4B majority stake in Chinese retail operations to Boyu Capital, eyes massive expansion

CHINA – Starbucks has agreed to sell a controlling majority stake in its China retail operations to private equity firm Boyu Capital for US$4 billion, marking a strategic new phase for the coffee giant’s presence in the world’s second-largest economy.

Under the joint venture, Boyu will hold up to 60% of Starbucks’ China retail business, while Starbucks retains a 40% stake and continues to own and license its brand and intellectual property.

This deal values Starbucks’ China retail business at more than US$13 billion, including proceeds from the sale and the value of Starbucks’ remaining interest.

The joint venture will be headquartered in Shanghai and operate Starbucks’ current 8,000 China stores, with plans to expand to 20,000 outlets, aiming to capture untapped markets in smaller cities and new regions.

Boyu Capital, a Hong Kong-based private equity firm founded partly by a grandson of former Chinese President Jiang Zemin, brings deep local market insight.

Its expertise will support Starbucks in navigating intense competition, particularly from local brands like Luckin Coffee, which offer more competitively priced beverages.

Starbucks CEO Brian Niccol highlighted that Boyu’s local knowledge and operational guidance will accelerate growth and innovation, strengthening customer experiences while maintaining Starbucks’ high service standards.

Starbucks will retain control over key non-retail assets, including the Kunshan Coffee Innovation Park and Yunnan Farmer Support Center, emphasizing continued investment in sustainable sourcing.

This partnership represents a critical step for Starbucks to revitalize and scale its China operations amid fierce market dynamics while blending global coffee leadership with localized strategic insight.

Starbucks has recently adopted a strategic approach to divestments and investments globally to optimize growth and operational efficiency.

Concurrently, Starbucks is undertaking a US$1 billion restructuring in North America, focusing on closing underperforming stores and modernizing key locations to enhance customer experience.

The company is also prioritizing selective growth in emerging markets and expanding digital innovation to maintain relevance.

These strategic shifts indicate Starbucks’ commitment to strengthening core markets while creating long-term value through adaptable business models, partnerships, and sustainable practices.

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