Starbucks Transfers Majority China Stake to Boyu Capital in $4B Deal

Starbucks has agreed to sell a 60% controlling stake in its China retail business to private equity firm Boyu Capital for $4 billion, marking a significant strategic shift to address challenges in the Chinese market. The joint venture will see Starbucks retain a 40% stake and continue to license its brand and intellectual property, aiming to leverage Boyu's strong local connections to enhance customer experience and accelerate expansion. Starbucks' market share in China has dropped sharply from 34% in 2019 to 14% in 2024 due to fierce competition from local chains like Luckin Coffee and Cotti Coffee, which attract price-sensitive consumers with lower-priced offerings. Starbucks plans to grow its store count in China from 8,000 to over 20,000 with Boyu's partnership, focusing on maintaining its brand's premium positioning rather than engaging in a price war. The deal, expected to close after regulatory approval, reflects Starbucks' adaptation to China's economic slowdown and evolving consumer preferences while positioning the company for long-term growth through a combined value exceeding $13 billion from the sale, retained interest, and licensing fees. Boyu Capital's local market expertise and financing capabilities are seen as critical to Starbucks regaining momentum in its second-largest global market.