Starbucks to cede control of China retail arm to Boyu in $4bn deal

Core Insights - Starbucks has agreed to sell a majority stake in its China retail operations to Boyu Capital for $4 billion, establishing a joint venture where Boyu will hold up to 60% [1] - The overall valuation of Starbucks' China retail business is estimated to exceed $13 billion, factoring in the sale proceeds and the value of Starbucks' remaining interest [2] - The joint venture aims to combine Starbucks' global coffee leadership with Boyu's local market expertise to accelerate growth and enhance customer experiences [4] Company Strategy - Starbucks will retain a 40% stake in the joint venture and continue to own and license the brand and intellectual property [1] - The joint venture will be headquartered in Shanghai and will manage Starbucks' 8,000 coffeehouses in China, with plans to expand to 20,000 locations [4] - Starbucks will maintain ownership of non-retail assets, including the Kunshan Coffee Innovation Park and the Yunnan Farmer Support Center [5] Market Context - The deal follows a competitive selection process, with Boyu being one of five shortlisted candidates [6] - The joint venture is expected to finalize once regulatory approvals are obtained, targeting completion in the second quarter of Starbucks' fiscal 2026 [6] - Boyu Capital's partner emphasized the strong brand connection Starbucks has with Chinese consumers and the potential for innovation in the market [3]