Starbucks Sells Majority Stake in China to Boyu Capital
Starbucks finalized a deal with Boyu Capital to sell a 60% stake in its China operations. The venture aims to expand the store network to 20,000 locations.
STARBUCKS CORP has officially finalized an agreement with Boyu Capital to transfer a majority stake in its operations within China. The deal, which was first outlined in November, is designed to accelerate the coffee chain's expansion in the world's second-largest economy as it faces increasing pressure from local competitors.
Under the terms of the transaction, funds managed by Boyu Capital—an investment firm whose founders include the grandson of former Chinese President Jiang Zemin—will hold a 60% stake in the stores. Starbucks will retain a 40% interest and will continue to license its brand and intellectual property to the venture. This strategic move comes as domestic chains like Luckin Coffee and Cotti Coffee have aggressively captured market share by offering lower prices.
Molly Liu, the chief executive officer of the regional division, noted that the partnership is intended to better tailor the brand to the local market.
"the deal would drive hyper-localization of the brand in the country."
Currently, there are approximately 8,000 Starbucks locations operating across the country. With the support of Boyu Capital, the company plans to more than double its footprint, setting a long-term target of 20,000 stores nationwide.
