Starbucks Divests 60% Stake in China Retail Operations in $4 Billion Deal

Starbucks has announced a significant restructuring of its China operations, selling a 60% stake in its retail business to Chinese investment firm Boyu Capital for $4 billion, according to news reports. 

The coffee giant will retain a 40% interest in the joint venture and continue to own and license the Starbucks brand in China.

Details of the Joint Venture

The partnership with Boyu Capital aims to strengthen Starbucks’ presence in China, particularly in smaller and emerging cities. The deal values Starbucks’ China business at over $13 billion, which includes the proceeds from the sale, the value of its retained stake, and future royalties. 

Starbucks’ China headquarters will continue to operate from Shanghai, and the transaction is expected to be completed in the second quarter of Starbucks’ 2026 fiscal year, which began on 29 September.

Strategic Importance and Market Outlook

Having entered China nearly 3 decades ago, Starbucks has played a vital role in developing the nation’s coffee culture and now operates around 8,000 outlets, making it its second-largest market after the US. 

However, competition from local players such as Luckin Coffee and declining same-store sales in recent years have prompted the company to seek a strategic partner. 

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Conclusion 

Starbucks’ partnership with Boyu Capital marks a strategic shift to strengthen its foothold in China amid rising local competition. Retaining a 40% stake, Starbucks aims to leverage Boyu’s local expertise to expand into smaller cities and achieve its long-term target of 20,000 stores nationwide.

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