Starbucks is selling control of its second-largest business as part of a new partnership in China.
The coffee giant has entered into a $4 billion agreement with private equity firm Boyu Capital to form a joint venture that will operate Starbucks’ nearly 8,000 stores in China.
Under the deal, Boyu will hold up to a 60% stake in the venture, with Starbucks retaining 40%. The U.S. company will continue to own and license the Starbucks brand and intellectual property to the new entity.
“This approach allows us to combine the strength of the Starbucks brand, our coffee expertise, the third place and our unique partner culture with Boyu’s deep knowledge of the China market and local expertise,” said Brian Niccol, CEO of Starbucks.
Starbucks said it expects the total value of its China retail business to exceed $13 billion, which includes proceeds from the sale, its remaining 40% stake and expected licensing fees over the next decade. The transaction is expected to close in the second quarter of fiscal 2026, subject to regulatory approval.
The move comes as Starbucks faces mounting competition and financial pressure in China, its second-largest market after the United States.
Local rival Luckin Coffee has surged ahead with more than 20,000 stores across China, outpacing Starbucks’ footprint and attracting consumers with lower prices and rapid expansion.
Starbucks said its new partnership with Boyu marks the next phase in its 26-year journey in China, combining its global brand strength and partner-centered culture with Boyu’s on-the-ground expertise.
“Boyu’s deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions,” Niccol added.
“We’ve found a partner who shares our commitment to a great partner experience and world-class customer service.”
Founded in 2011, Boyu Capital is a leading alternative investment firm with offices in Hong Kong, Beijing, Shanghai and Singapore, and more than 200 portfolio companies.
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