Starbucks to sell 60% stake in China business to Boyu Capital for $4 billion

Starbucks said on Tuesday that it would form a joint venture with Chinese investment firm Boyu Capital, marking a significant shift in its strategy for the world’s second-largest coffee market.

Under the agreement, Boyu Capital will invest $4 billion to acquire a 60 percent stake in Starbucks’ retail operations in China. Starbucks will retain the remaining 40 percent interest, continuing to own and license the brand.

The partnership underscores the Seattle-based coffee chain’s effort to reinvigorate growth in China, where it opened its first store nearly three decades ago and helped cultivate the country’s coffee culture. Today, China is Starbucks’ second-largest market after the United States, with roughly 8,000 locations nationwide.

But in recent years, Starbucks has faced intensifying competition from local players like Luckin Coffee, whose lower prices and rapid expansion have eroded the American company’s dominance. Analysts say the tie-up with Boyu Capital could give Starbucks greater agility in navigating China’s shifting consumer landscape, especially in smaller cities where growth remains untapped.

In July, Starbucks’ chairman and chief executive, Brian Niccol, said the company had been weighing about 20 potential offers for a stake in its China business before settling on Boyu. The new joint venture is expected to close after regulatory approvals.

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