Starbucks Corp. (SBUX) made a significant change to its approach in its second-largest market on Monday when it announced that it would establish a joint venture with Chinese investment firm Boyu Capital to run Starbucks locations in China.
Under the terms of the deal, Boyu will pay $4 billion to acquire a 60 percent share in Starbucks' retail operations in China. Starbucks will continue to own and license the Starbucks brand, and it will hold a 40 percent stake.
With the proceeds of the sale, its retained stake, and royalties, the Seattle-based coffee chain said the value of its China business will now exceed $13 billion.
Starbucks, which has about 8,000 locations in China, has played a significant role in fostering the nation's coffee culture since its entry almost 30 years ago. However, due to fierce competition from inexpensive, rapidly expanding local competitors like Luckin Coffee, it has struggled recently, as evidenced by two consecutive fiscal years of declining same-store sales.
As Starbucks seeks to reach 20,000 locations in China, CEO Brian Niccol stated that Boyu's "deep local knowledge and expertise" will aid in accelerating growth, especially in smaller cities.
According to Boyu Capital Partner Alex Wong, the collaboration demonstrates a common conviction in Starbucks' "enduring strength" in the Chinese market.
In the second quarter of Starbucks' fiscal year 2026, the deal is anticipated to close.
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May 15, 2026 15:25 ET Apart from the confirmation of Kevin Warsh as the next Fed chair, the main news on the economics front this week included key price data from the U.S. and the first quarter economic growth figures from major economies. Both consumer prices and producer costs have started to reflect the effect of supply shocks due to the Middle East conflict. In Europe, GDP data was in focus, while inflation data from China dominated the news flow in Asia.