Starbucks Sells China Majority Stake to Boyu

Key Moments

Transaction Overview

Starbucks said on Thursday that it has finalized an agreement with Boyu Capital to transfer control of its China business, marking a significant shift in the company’s strategy for one of its most important international markets.

The structure of the deal, first outlined in November, is designed to accelerate the coffee chain’s expansion in the world’s second-largest economy. Starbucks noted that local competitors, including Luckin and Cotti, have been gaining ground by offering lower-priced alternatives.

Ownership Structure and Governance

Under the terms disclosed by Starbucks, funds managed by Boyu will hold a 60% interest in the China store portfolio. Starbucks will keep the remaining stake and continue to license its brand and intellectual property to the new venture.

Starbucks highlighted that the founders of Boyu include the grandson of former Chinese President Jiang Zemin. The partnership aligns capital, local expertise, and brand ownership under a joint structure intended to bolster competitiveness in China’s increasingly crowded coffee market.

Strategic Focus on Localization

Molly Liu, chief executive officer of Starbucks China, emphasized that the new structure is intended to sharpen the company’s local positioning. She said in a statement that the deal would drive “hyper-localization” of the brand in the country.

This focus on localization comes as Starbucks faces intensified competition from domestic chains that are tailoring offerings and pricing to Chinese consumers.

Store Expansion Ambitions

Starbucks reported that there are currently around 8,000 Starbucks locations across China. Working with Boyu, the company plans to more than double that footprint, targeting a total of 20,000 stores.

The expansion goal underscores how central China remains to Starbucks’ long-term growth plans, even as it cedes majority control of its on-the-ground operations to a local partner.