Starbucks Forms $4 Billion Joint Venture with Boyu Capital to Accelerate Growth in Chinese Market

China represents Starbucks' second-largest market outside the United States, with approximately 8,000 store locations.

Starbucks announced on Monday that it is establishing a joint venture with Chinese investment firm Boyu Capital to manage Starbucks operations across China.

According to the agreement, Boyu will purchase a 60% stake in Starbucks' Chinese retail operations, valued at $4 billion. Starbucks will maintain a 40% interest in the joint venture while retaining ownership and licensing rights to the Starbucks brand.

Starbucks indicated that its China business will have a total valuation exceeding $13 billion, which includes proceeds from selling the controlling interest to Boyu, the value of its remaining 40% stake, and the value of its royalties.

Starbucks entered the Chinese market nearly three decades ago and has been recognized for cultivating coffee culture throughout the country. China stands as Starbucks' second-largest market outside the United States, hosting 8,000 locations.

However, in recent years, the Seattle-based coffee giant has faced challenges in China from affordable, rapidly expanding Chinese competitors like Luckin Coffee. Starbucks has experienced declining same-store sales in China during its last two fiscal years.

As a response, Starbucks has been seeking a partner to help expand its Chinese business, particularly in smaller cities. In July, Starbucks Chairman and CEO Brian Niccol revealed that the company was evaluating approximately 20 offers for a stake in the company.

Niccol stated on Monday that Boyu shares Starbucks' commitment to delivering excellent experiences for both customers and employees. The partnership will also support Starbucks in achieving its objective of expanding to 20,000 stores across China over time.

"Boyu's deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions," Niccol said in a statement.

Boyu Capital Partner Alex Wong noted that Starbucks has established a profound connection with Chinese consumers over nearly three decades.

"This partnership reflects our shared belief in the enduring strength of that brand and the opportunity to bring even greater innovation and local relevance to customers across China," Wong stated.

Starbucks' China headquarters will remain in Shanghai. Boyu Capital, founded in 2011, maintains offices in Shanghai, Hong Kong, Singapore, and Beijing.

The companies expect to complete the deal in the second quarter of Starbucks' 2026 fiscal year, which began on September 29.

Starbucks shares remained unchanged in after-hours trading.