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Starbucks has announced a strategic partnership with Chinese investment firm Boyu Capital. The deal will see Boyu Capital acquire a controlling 60% stake in Starbucks' retail operations in China for $4 billion. The joint venture is expected to be finalized by the second quarter of Starbucks' 2026 fiscal year. Starbucks CEO Brian Niccol revealed that they were considering around 20 bids for a stake sale. Despite the major stake sale, Starbucks will continue to hold a 40% interest in the joint venture. The company will also continue to own and license its brand. Starbucks' business in China is estimated to be worth over $13 billion, factoring in proceeds from the controlling interest sale, value of its 40% stake, and royalty income. Starbucks has been a key player in developing China's coffee culture for nearly three decades. The country is Starbucks' second-largest market after the US, with 8,000 stores. However, the company has faced stiff competition from fast-growing local start-ups like Luckin Coffee. This has led to a decline in same-store sales over the last two fiscal years. In light of these challenges, Starbucks has been on the lookout for a partner to help expand its footprint, especially in smaller cities. Niccol said that the partnership with Boyu will help Starbucks achieve its long-term goal of expanding to 20,000 stores in China. Boyu's deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions, he said. Alex Wong from Boyu Capital echoed this sentiment, highlighting their shared belief in the strength of the Starbucks brand and its potential for innovation across China.
