Core Insights - Starbucks announced the sale of up to 60% of its Chinese business to Boyu Capital, valuing Starbucks China at $4 billion [1][2] - The joint venture will be managed from Shanghai, overseeing over 8,000 Starbucks stores in mainland China [1][9] - Starbucks retains 40% ownership and continues to own the brand and intellectual property, receiving licensing fees from the new joint venture [2][3] Shareholder Structure - The joint venture is structured with Starbucks Global as the direct partner, rather than Starbucks China, indicating a shift from a wholly-owned subsidiary to a joint venture [2] - The total value of Starbucks' retail business in China is projected to exceed $13 billion, comprising the sale proceeds, retained equity, and future licensing revenues [2] Acquisition Process - The sale process began in November 2024, with various potential buyers, including over 20 institutions, expressing interest [4][5] - After multiple rounds of bidding, Boyu Capital emerged as the final buyer, with a history of significant investments in the consumer sector [6][7] Valuation Insights - The final valuation of $4 billion is considered relatively low compared to earlier estimates of $5 billion to $7.5 billion [7][8] - Factors influencing the valuation include market comparisons, business fundamentals, and cash flow projections, alongside non-numerical elements like brand strength and management quality [7][8] Future Expansion Plans - The new joint venture aims to expand Starbucks' store count in China to 20,000, leveraging local expertise to penetrate smaller cities and emerging regions [9][10] - Starbucks has faced increased competition from local brands, resulting in a decline in market share from 42% in 2017 to 14% by 2024 [10]