Starbucks has reached an agreement to transfer majority ownership of its Chinese operations to Boyu Capital, an investment firm, in a transaction valued at $4 billion.
Under the terms announced Monday, the newly formed joint venture will see Boyu Capital taking up to a 60% interest in Starbucks’ retail business across China, while Starbucks will maintain a 40% minority stake. The Seattle-headquartered company will continue to hold and license its brand and intellectual property to the partnership, both parties confirmed.
This strategic move follows a comprehensive review by Starbucks exploring partnership opportunities in its second-largest global market. The company currently estimates the value of its China operations at over $13 billion, encompassing the proceeds from the controlling stake sale, its ongoing retained interest, and future licensing revenues.
The closure of the deal is contingent upon regulatory approval and is slated for completion in the second quarter of Starbucks’ fiscal year 2026.
Starbucks’ market presence in China has diminished in recent years amid heightened competition from fast-growing domestic players such as Luckin Coffee and Cotti, which have attracted customers with lower-priced products. Attempting to balance competitiveness and price integrity, Starbucks has faced challenges as China’s economic slowdown has led to greater consumer price sensitivity.
Entering the Chinese market in 1999, Starbucks played a pioneering role in popularizing coffee culture. However, it has seen its market share plummet to 14% in 2024 from 34% five years earlier, according to Euromonitor International. China now accounts for more than 20% of the company’s total café footprint.
