Starbucks has sold a 60% stake in its China operations to Boyu Capital for $4 billion, shifting to a licensing-based model to enhance efficiency and navigate an increasingly competitive market.

Target Information

Starbucks has recently announced a significant transaction in its 26-year history in China, selling a 60% majority stake in its China retail operations to Boyu Capital, a prominent private equity firm. This strategic move values Boyu’s stake at $4 billion, with the overall business being valued at over $13 billion. Despite selling the majority stake, Starbucks will retain a 40% ownership share and continue to license its brand and intellectual property. The company aims to transition towards a more asset-light operational model in its second-largest market, China, which currently boasts over 8,000 Starbucks stores with ambitions to increase that number to 20,000.

As competition intensifies—especially from rivals like Luckin Coffee—and the macroeconomic environment drives consumers towards more affordable options, Starbucks is reevaluating its approach in the challenging Chinese market. Under the direction of new CEO Brian Niccol, this joint venture is set to close by the second quarter of fiscal 2026, marking a pivotal shift in strategy for the company.

Industry Overview in China

The Chinese coffee market has undergone rapid development over the past decade, transitioning from a niche segment to a mainstream cultural phenomenon. In 2023, the total coffee market in China is poised to exceed $25 billion, fueled by growing urbanization and an emerging m