BEIJING, China – Starbucks has announced plans to sell a 60% stake in its China business to investment firm Boyu Capital in a $4 billion deal, marking one of the biggest foreign corporate shake-ups in the world’s second-largest economy in recent years.
Under the agreement, the US coffee giant will retain a 40% stake and full ownership of its brand in China. The deal values Starbucks’ China retail operations at about $13 billion and is expected to be completed next year.
The partnership with Boyu Capital, which has offices in Shanghai, Hong Kong and Singapore, aims to boost the chain’s competitiveness in a market increasingly dominated by homegrown rivals like Luckin Coffee.
“This is a significant milestone that positions us for long-term growth in China,” Starbucks said in a statement, adding that the collaboration will combine its “globally recognised brand and coffee expertise” with Boyu’s “deep understanding of Chinese consumers.”
China has been Starbucks’ second-largest market after the United States since its entry in 1999.
The company currently operates about 8,000 outlets in the country and plans to expand to as many as 20,000 in the coming years. Its Chinese operations will remain headquartered in Shanghai.
Starbucks has struggled in recent years with falling sales in China amid slower consumer spending, post-pandemic economic uncertainty and fierce competition from domestic chains offering lower prices and frequent discounts. Luckin Coffee now operates more stores than Starbucks across China.
The restructuring follows months of speculation about the coffee chain’s future in China after former CEO Laxman Narasimhan hinted at seeking “strategic partnerships” to stay competitive.
Since taking over as chief executive last year, Brian Niccol — formerly of Chipotle — has been steering a global turnaround, revamping Starbucks’ menu and hiring more baristas while scaling back automation.
The deal also reflects a broader trend of global brands rethinking their China strategies. Yum! Brands, owner of KFC and Pizza Hut, spun off its Chinese operations in 2016, while Gap and Uber have also scaled back their presence in the country.
Starbucks said it plans to launch new beverages and digital platforms tailored for Chinese consumers as part of the new partnership.
