By DEE-ANN DURBIN
Starbucks announced Monday that it is forming a joint venture with Chinese investment firm Boyu Capital to operate Starbucks coffee shops in China.
As part of the deal, Boyu will acquire a 60% stake in Starbucks’ China retail operations, valued at $4 billion. Starbucks will retain a 40% stake in the joint venture and will own and operate the Starbucks brand.
Starbucks highlighted that its China operations will have a total value of more than $13 billion, including the proceeds from the sale of the majority stake to Boyu, the value of its 40% stake and royalties.
Starbucks entered China almost 30 years ago and is credited with developing the country’s coffee culture. China is Starbucks’ second-largest market outside the United States, with 8,000 stores.
However, the Seattle-based coffee industry giant has faced challenges in the Asian country in recent years due to the emergence of lower-cost, fast-growing startups like Luckin Coffee. Sales at Starbucks stores in China have fallen over the past two fiscal years.
As a result, Starbucks was looking for a partner to help it expand its operations in China, particularly in smaller cities. Brian Niccol, Starbucks chairman and CEO, said in July that the company was evaluating about 20 offers to acquire a stake in the company.
Niccol noted Monday that Boyu shares with Starbucks a commitment to providing an exceptional experience for customers and employees. It will also help Starbucks achieve its goal of eventually growing to 20,000 stores in China, Niccol noted.
“Boyu’s deep local knowledge and experience will help accelerate our growth in China, particularly as we expand into smaller cities and new regions,” Niccol said in a statement.
Alex Wong, partner at Boyu Capital, said Starbucks has built a deep connection with Chinese consumers for nearly three decades.
“This partnership reflects our shared belief in the enduring strength of the brand and the opportunity to bring even more innovation and local relevance to customers across China,” Wong said in a statement.
Starbucks’ Chinese headquarters will remain in Shanghai. Boyu Capital, founded in 2011, has offices in Shanghai, Hong Kong, Singapore and Beijing.
The companies said they expect to finalize the deal during the second quarter of Starbucks’ 2026 fiscal year. Starbucks’ fiscal 2026 began on September 29.
Shares of Starbucks were flat after hours.
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This story was translated from English by an AP editor using a generative artificial intelligence tool.
