Starbucks sells 60% stake of China business to Boyu Capital

Starbucks has agreed to sell a 60% stake in its China operations to Boyu Capital, a private equity firm, in a deal valued at US$4 billion as the coffee chain seeks to revitalise its performance in this key market.

Boyu Capital, founded in 2011, is an investment firm with Chinese roots and a global mandate. It boasts a portfolio of over 200 companies and operates from offices in Hong Kong, Beijing, Shanghai, and Singapore. This partnership builds on Starbucks' over 26-year presence in China.

Combining Starbucks globally recognised brand and coffee expertise with Boyu's deep understanding of Chinese consumers. The partnership marks a significant milestone in Starbucks ongoing transformation and underscores its commitment to accelerating long-term growth in China, one of the company’s most important and fastest-growing markets globally.

Under the agreement, Boyu and Starbucks will operate a joint venture with Boyu holding a up to 60% interest in Starbucks retail operations in China. Starbucks will retain a 40% interest in the joint venture and will continue to own and license the Starbucks brand and intellectual property to the new entity. Boyu will acquire its interest based on a cash-free, debt-free enterprise value of approximately US$4 billion.

The joint venture aims to elevate the customer experience by accelerating innovation in beverages and digital platforms, expanding into new cities, and deepening local customer connections. The business, which will remain headquartered in Shanghai, currently owns and operates 8,000 stores in the region, with a shared long-term vision to grow to 20,000 locations.

Starbucks expects the total value of its China retail business to exceed US$13 billion, composed of proceeds from the sale of a controlling interest in the joint venture to Boyu, the value of Starbucks retained interest in the joint venture, and the net present value of ongoing licensing economics payable to Starbucks over the next decade or longer.

"Boyu's deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions. 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," said Brian Niccol, chairman and chief executive officer, Starbucks Coffee Company.

"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. Together, we aim to combine Starbucks global coffee leadership with Boyu's deep market insights and expertise to accelerate growth and create exceptional experiences for millions of customers," said Alex Wong, partner, Boyu Capital.

"Building on our positive business momentum, our partnership with Boyu will enable Starbucks China to fully unlock the vast market opportunity. 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. This collaboration is a powerful commitment to our next chapter of growth," said Molly Liu, executive vice president and chief executive officer, Starbucks China.

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