A Starbucks store in China.
Seattle-based coffee giant Starbucks is selling a 60% stake in its mainland China coffee shop business to Chinese private equity firm Boyu Capital in a deal valued at about $4 billion.
Expected to be finalized in the second quarter of 2026, the deal comes amidst rapid expansion of Chinese competitors such as Luckin Coffee and Cotti Coffee, while promising to reshape the coffee retail landscape in Starbucks’ second-largest market behind the United States.
Under the agreement, Starbucks and Boyu will form a joint venture to own and operate roughly 8,000 existing Starbucks stores. Starbucks will maintain a 40% stake in the retail business while continuing to own and license its brand and intellectual property.
The venture aims to expand Starbucks’ retail footprint in China to as many as 20,000 locations, with a focus on “accelerating innovation in beverages and digital platforms” and expansion into new cities. The business will continue to be headquartered in Shanghai.
“Boyu’s deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions,” Starbucks CEO Brian Niccol said in an announcement from the company.
The structure echoes moves by other global food and beverage giants that have sold down or spun off China operations while retaining brand licensing and minority positions. McDonald’s and Yum Brands both entered similar joint-venture arrangements in the past decade, then used local partners to accelerate store growth across China.
Starbucks first opened in China in 1999. By 2023, China had overtaken the U.S. as the largest branded coffee shop market in the world, marking a historic shift within the traditionally tea-drinking country.
Beyond growing its substantial retail presence, Starbucks has invested heavily in green coffee production in China’s Yunnan region, as well as in roasted coffee production and distribution. The company opened its first farmer-support center in Yunnan in 2012 and opened a $220 million roasting plant outside of Shanghai in 2023.
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Nick Brown
Nick Brown is the editor of Daily Coffee News by Roast Magazine.
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