Starbucks agrees joint venture with Boyu to accelerate China growth

Starbucks Coffee Company announced on Tuesday that it has entered into an agreement with Boyu Capital, a leading Chinese investment firm, to form a joint venture that will operate its retail business in China — a move marking a major step in the coffee chain's next phase of growth in its fastest-expanding market.

Under the agreement, Boyu Capital will acquire up to a 60 percent stake in Starbucks' China retail operations based on a cash-free, debt-free enterprise value of about $4 billion, while Starbucks will retain a 40 percent interest. The US coffee giant will continue to own and license the Starbucks brand and intellectual property to the new entity.

Starbucks expects the total value of its China retail business will exceed $13 billion, reflecting proceeds from the stake sale, the retained equity interest, and the net present value of ongoing licensing payments over the next decade and beyond.

The partnership underscores Starbucks' long-term confidence in the Chinese market, where it has operated for over 26 years and currently runs about 8,000 stores.

The joint venture, headquartered in Shanghai, aims to expand that footprint to as many as 20,000 locations over time, tapping growth in smaller cities and emerging regions.

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

Boyu Capital, known for investments in technology innovation, consumer retail and healthcare, has backed more than 200 companies, including SKP luxury shopping centers and the Mixue Group tea chain.

Alex Wong, partner at Boyu Capital, said: "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."

The transaction is expected to close in the second quarter of fiscal year 2026, subject to regulatory approvals.

Industry analysts view the deal as a strategic move to strengthen Starbucks' competitiveness against local rivals such as Luckin Coffee.

Jason Yu, general manager of CTR Market Research, said that Boyu's investment "will provide substantial funding for Starbucks' store expansion, particularly in smaller cities and emerging regions", while also helping the company "optimize store locations, introduce localized products, and enhance brand competitiveness in lower-tier markets".