Starbucks has agreed to sell up to 60% of its retail operations in China to Boyu Capital in a deal valued at $4 billion, forming a joint venture aimed at revitalizing growth amid increasing local competition.

Information on the Target

Starbucks Corporation has announced the sale of up to 60% of its retail business in China to Boyu Capital, a distinguished private equity firm, in a transaction valued at $4 billion. This strategic move will lead to the formation of a joint venture that will manage nearly 8,000 Starbucks outlets across China. Importantly, Starbucks will retain its brand ownership and licensing rights within this new entity, ensuring that the quality and reputation of the Starbucks brand are maintained.

According to company estimates, the total value of Starbucks’ operations in China is projected to exceed $13 billion. This figure accounts for the proceeds from this sale, the remaining 40% stake retained by Starbucks, and anticipated licensing income over the next decade. CEO Brian Niccol emphasized that this partnership seeks to leverage Starbucks’ global coffee expertise alongside Boyu’s extensive knowledge of the local market, aiming for mutual growth and market competitiveness.

Industry Overview in China

China has emerged as a significant market for Starbucks since the company launched its first store in the country in 1999. The exponential growth in China's middle class and their growing affinity for Western lifestyle brands have fueled S