Starbucks sells majority stake in China business to Boyu Capital

Starbucks has agreed to sell a majority stake in its China business to investment firm Boyu Capital, marking a pivotal shift in strategy for one of the coffee chain’s largest and most dynamic markets.

Under the new joint venture, Boyu will hold up to 60 percent of Starbucks’ retail operations in China, while Starbucks retains 40 percent and continues to own and license its brand and intellectual property to the new entity.

Boyu’s stake is based on a cash-free, debt-free enterprise value of around $4 billion. Starbucks expects the total value of its China retail business to exceed $13 billion, reflecting proceeds from the sale, the value of its retained interest and the long-term licensing income it will receive over the next decade.

The agreement, one of the biggest transactions involving a global consumer brand in China in recent years, is expected to complete in the second quarter of fiscal 2026, subject to regulatory approval.

A turning point in Starbucks’ China strategy

The deal follows months of speculation about Starbucks’ plans in China after former chief executive Laxman Narasimhan confirmed that the company was exploring “strategic partnerships” to stay competitive in the world’s second-largest economy.

The move mirrors a wider pattern of Western food chains re-evaluating their presence in China. KFC and Pizza Hut’s operations in China were spun off by their owner Yum! Brands in 2016 after struggling in the country for years, highlighting the challenges and opportunities global food companies face in adapting to local markets.

“Boyu’s deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions,” said Brian Niccol, Starbucks’ chairman and chief executive officer. “We’ve found a partner who shares our commitment to a great partner experience and world-class customer service. Together we will write the next chapter of Starbucks’ storied history in China.”

The new venture, headquartered in Shanghai, will oversee 8,000 existing Starbucks stores across China with a shared goal to reach 20,000 locations over time.

Combining global brand power with local insight

The partnership pairs Starbucks’ globally recognised coffee brand and operational know-how with Boyu’s understanding of Chinese consumer trends and digital commerce.

Alex Wong, Partner at Boyu Capital, said: “Starbucks has built an iconic brand and a deep connection with Chinese consumers over the past 26 years. This partnership reflects our shared belief in the enduring strength of that brand and the opportunity to bring even greater innovation and local relevance to customers across China.”

Wong added that combining Starbucks’ coffee expertise with Boyu’s market insight would “accelerate growth and create exceptional experiences for millions of customers”.

Molly Liu, executive vice president and chief executive officer of Starbucks China, said the partnership would “fully unlock the vast market opportunity” in the region. “Together, we will deliver exceptional coffee experiences to more Chinese consumers than ever before, create greater career opportunities for our green apron partners, and drive the future of China’s specialty coffee industry,” she said.

Part of a wider global transformation

The move forms part of Starbucks’ wider restructuring under Niccol, who became chief executive in September 2024. The company recently announced the closure of around 1 percent of stores across the United States, United Kingdom, Switzerland and Austria following a strategic portfolio review.

At the same time, Starbucks is modernising its menu, expanding into the functional beverage market with Protein Lattes and Protein Cold Foam drinks in the United States, and investing in new digital platforms.

In China, however, competition from domestic coffee chains and shifting consumer behaviour have forced a rethink. The Boyu partnership gives Starbucks the opportunity to strengthen its local relevance while retaining ownership of its brand and a long-term financial interest in what remains a cornerstone of its global growth ambitions.