Starbucks sells 60% of China business in $4bn deal with Boyu Capital

Starbucks has announced the sale of a 60% stake in its China operations to Boyu Capital in a $4 billion deal aimed at reviving growth in one of its most crucial markets.

The move will leave Starbucks with a 40% stake in the business while retaining full ownership of its brand in China. Despite the stake reduction, the coffee giant said it remains committed to the market, which it described as “critical to the company’s global future.”

The Chinese arm, valued at $13 billion, will continue to be headquartered in Shanghai and currently runs more than 8,000 outlets across the country — a figure the company hopes to expand to 20,000.

Starbucks said the partnership marks “a significant milestone” and would blend its global coffee expertise with Boyu Capital’s deep understanding of Chinese consumer behaviour.

“This collaboration underscores our long-term commitment to China,” the company said, adding that it plans to launch new beverage innovations and digital platforms to stay competitive.

Boyu Capital, a Hong Kong-based private equity firm, invests heavily in retail, tech, and finance sectors across Asia.

The deal comes amid stiff competition from local rival Luckin Coffee, which recently overtook Starbucks in number of stores nationwide by offering cheaper drinks and aggressive discounts.

Starbucks has struggled in China over the past few years due to the pandemic, reduced consumer spending, and a series of boycotts. The firm has since slashed prices to attract customers, but that move has squeezed profits.

The agreement is among the largest in recent years involving a global consumer brand’s Chinese operations. It follows similar strategic shifts by major Western companies such as Yum! Brands — owner of KFC and Pizza Hut — which spun off its China business in 2016.

Under CEO Brian Niccol, Starbucks has been revamping its global operations, hiring more baristas, cutting automation projects, and expanding its menu to win back customers. The chain now operates more than 40,000 stores worldwide.