Majority Stake Transfer and Deal Framework
Starbucks has agreed to transfer a majority share of its China retail business to private equity firm Boyu Capital, marking one of the coffee giant’s biggest international restructurings. The transaction, which values the Chinese arm at about $4 billion, will see Boyu take ownership of up to 60% of the new venture, while Starbucks retains a 40% interest. Under the terms, Starbucks will continue to license its brand, menu, and operating standards to the joint venture. Both companies expect the agreement to close in the second quarter of fiscal 2026, pending official approvals from Chinese regulators.
Why Starbucks Is Making the Move
The decision reflects Starbucks’ effort to reignite momentum in its second-largest market, where it faces mounting pressure from rapidly expanding local competitors such as Luckin Coffee. The company, which currently manages around 8,000 cafés across China, aims to accelerate expansion to 20,000 locations through Boyu’s regional knowledge and investment capabilities. Partnering with a well-connected Chinese investor gives Starbucks deeper reach into smaller cities while easing operational costs and regulatory complexity in an increasingly crowded market.
Future Prospects and Market Significance
Starbucks projects that the transaction, along with future licensing fees and its retained ownership stake, could yield a combined valuation exceeding $13 billion over time. The deal signals a strategic pivot from direct ownership toward partnership-driven growth in Asia, allowing the Seattle-based company to concentrate resources on other global markets. Analysts say the joint venture will test whether Starbucks can maintain brand consistency and premium positioning while ceding day-to-day control in its fastest-growing region.
