Popular US-headquartered coffeehouses and roasteries brand, Starbucks, has sold off its majority stake in China business to Chinese investment firm, Boyu Capital, in a US$ 4 billion deal.
Under the joint venture agreement, Boyu will acquire a 60 per cent interest in Starbucks’ retail operations in China, while Starbucks will retain a 40 per cent interest and own and licence the Starbucks brand, with headquarters remaining in Shanghai.
Starbucks’ Chairman and CEO, Brian Niccol, said on Monday that Boyu shares Starbucks’ commitment to “providing a great experience for both customers and employees”.
“Boyu’s deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions,” Niccol said in a statement, in which he also said that Boyu will help Starbucks achieve its goal of growing to 20,000 stores in China over time.
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Starbucks, which entered China almost 30 years ago, has been credited with making coffee culture popular across the traditionally tea-loving country.
China is Starbucks’ second-largest market outside the US, with 8,000 locations.
However, the Seattle-based coffee giant has struggled in China in recent years, especially in the face of cheap, fast-growing Chinese startups like Luckin Coffee, which led to a drop in Starbucks’ same-store sales in China in the last two fiscals.
Resultantly, Starbucks has been looking for a partner to help it grow its business in the Red Dragon, particularly in smaller cities. In July, Nicco said the company was evaluating around 20 offers for a stake in the company.
Meanwhile, Boyu Capital Partner, Alex Wong, said Starbucks has built a deep connection with Chinese consumers over nearly three decades.
“This partnership reflects our shared belief in the enduring strength of that brand and the opportunity to bring even greater innovation and local relevance to customers across China,” Wong said in a statement.
Boyu Capital, which was founded in 2011, has offices in Shanghai, Hong Kong, Singapore and Beijing.
The companies said they expect to finalise the deal in the second quarter of Starbucks’ 2026 fiscal year, which began on Sept. 29.
Starbucks shares were flat in after-hours trading.
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