Starbucks Corp has agreed to sell a 60% stake in its China retail operations to Boyu Capital for $4 billion, marking one of the most significant foreign divestments in China’s consumer sector in recent years. The move comes as the world’s largest coffee chain seeks to strengthen its position in a market increasingly dominated by agile local competitors such as Luckin Coffee.
The deal will create a joint venture in which Starbucks retains a 40% ownership, continuing to license its brand, menu, and operating systems to the Chinese unit. The transaction values Starbucks China at roughly $13 billion, reflecting its strong brand equity despite slowing growth.
Starbucks first entered the Chinese market in 1999 and has since expanded to nearly 8,000 stores across more than 250 cities. However, it now faces stiff competition from homegrown coffee brands offering lower prices and faster delivery options. The company has also been grappling with economic headwinds and changing consumer preferences in China’s post-pandemic retail landscape.
By partnering with Boyu, Starbucks aims to leverage the local firm’s market expertise, operational efficiency, and consumer insights to accelerate expansion. The coffee giant has set an ambitious goal of growing its store network to 20,000 outlets in the coming years, positioning China as its most important growth market outside the United States.
Reports suggest, Boyu Capital is in talks with major Chinese banks to secure around $1.4 billion in loans to fund the acquisition. The financing is expected to be structured as an onshore, yuan-denominated facility, which would make it one of the largest leveraged buyouts in China this year.
Industry analysts view the partial sale as a strategic recalibration rather than a retreat. The partnership allows Starbucks to maintain brand control while gaining the flexibility and capital required to compete in China’s fast-evolving beverage market.
If approved by regulators, the deal is expected to close in 2026, reshaping the dynamics of China’s booming coffee sector.