Starbucks sells 60% of its China business stake for billion.

Starbucks Corporation announced a strategic partnership with Chinese investment firm Boyu Capital, aimed at enhancing its operational footprint in China. This joint venture will see Boyu acquiring a 60% stake in Starbucks’ retail operations within the country, a transaction valued at approximately billion. Starbucks will retain a 40% interest and maintain ownership and licensing rights for the Starbucks brand.

The agreement underscores a significant valuation of Starbucks’ Chinese operations, exceeding billion. This figure includes the proceeds from the transaction with Boyu, the value of Starbucks’ remaining stake, and associated royalty revenues.

Having entered the Chinese market nearly three decades ago, Starbucks has played a pivotal role in cultivating coffee culture throughout the nation. With approximately 8,000 locations, China ranks as Starbucks’ second-largest market after the United States. However, the company has faced mounting challenges in recent years, particularly from competitive pressure exerted by rapidly expanding domestic rivals, such as Luckin Coffee. Consequently, Starbucks reported declining same-store sales within China for the past two fiscal years.

In light of these challenges, Starbucks has been actively seeking local partnerships to bolster its growth strategy, particularly in smaller urban centers. Earlier this year, CEO Brian Niccol disclosed that the company was reviewing about 20 proposals for a stake in its Chinese operations.

Niccol expressed optimism regarding the new partnership with Boyu, noting that the firm shares Starbucks’ commitment to delivering exceptional experiences for customers and employees alike. He emphasized that the collaboration will be crucial in achieving Starbucks’ goal of expanding its store count in China to 20,000 locations over time.

Alex Wong, a partner at Boyu Capital, reflected on the longstanding connection between Starbucks and Chinese consumers, emphasizing the partnership’s potential to drive brand innovation and enhance local relevance in the market.

Starbucks’ regional headquarters will remain in Shanghai. Boyu Capital, established in 2011, operates from multiple locations including Shanghai, Hong Kong, Singapore, and Beijing. The companies anticipate finalizing the joint venture by the second quarter of Starbucks’ fiscal year 2026, which commenced on September 29. Following the announcement, Starbucks shares remained stable in after-hours trading, indicating a cautiously optimistic investor sentiment regarding this significant pivot in its Chinese operations.

This collaboration marks a critical juncture for Starbucks as it aims to navigate the challenges of the competitive landscape in China while continuing to build on its brand legacy in one of the world’s most lucrative markets.