Starbucks Sells Majority Stake in China Business to Boyu Capital in $4 Billion Deal
Starbucks has announced plans to sell a 60% stake in its China business to private equity firm Boyu Capital in a $4 billion deal, marking one of the largest consumer market transactions in China in recent years.
Under the new structure, Starbucks will retain a 40% ownership stake in its Chinese retail operations and maintain full ownership of the Starbucks brand in the country. The partnership values the company’s China arm at $13 billion and aims to strengthen its position amid growing competition from domestic rivals.
The Seattle-based coffee chain first entered China in 1999, and the market has since grown to become its second largest globally after the United States. However, the brand has faced mounting pressure from fast-rising local competitors like Luckin Coffee, which now operates more stores in China than Starbucks.
Despite these challenges, Starbucks says it remains committed to its long-term strategy in China. The business, which will continue to be headquartered in Shanghai, currently manages 8,000 outlets across the country and plans to expand to as many as 20,000 locations in the coming years.
Describing the move as a “significant milestone,” Starbucks said the collaboration combines its globally recognized coffee expertise and employee-focused culture with Boyu Capital’s deep understanding of Chinese consumers. The company also revealed plans to roll out new beverages and digital platforms tailored to the local market, with the deal expected to be finalized in 2026.
Boyu Capital, which has offices in Shanghai, Hong Kong, and Singapore, is known for its investments in retail, financial services, and technology sectors across Asia.
Starbucks’ future in China had been under review since former CEO Laxman Narasimhan hinted at exploring “strategic partnerships” to stay competitive in the world’s second-largest economy. The decision echoes moves by other major US brands, including Yum! Brands, which spun off its KFC and Pizza Hut China operations in 2016 after years of underperformance.
Recent declines in sales, slower consumer spending, and post-pandemic economic pressures have hit Starbucks’ performance in China, forcing the company to cut prices in response to Luckin Coffee’s aggressive discount strategy.
Since taking over as CEO in 2024, Brian Niccol – formerly of Chipotle – has launched efforts to revitalize Starbucks globally, revamping its menu, rehiring baristas, and reducing automation to improve service quality.
Starbucks currently operates more than 40,000 stores worldwide.
