Boyu Capital is set to acquire a controlling stake in Starbucks’ China operations in a transaction valuing the business at around $4bn, marking one of the largest divestments by a Western consumer brand in China in recent years, according to a report by Reuters.
Under the terms of the deal, Boyu will hold up to 60% of a newly created joint venture, with Starbucks retaining 40% and continuing to license its brand and intellectual property to the business. The Seattle-based coffee chain said the deal will enable it to “accelerate expansion” in the world’s second-largest economy, targeting growth from its current 8,000 coffeehouses to over 20,000 locations.
The transaction gives Starbucks an implied long-term valuation exceeding $13bn for its China business, including sale proceeds, retained equity, and expected licensing income over the next decade. Starbucks’ shares rose 3% in after-hours trading following the announcement.
For Boyu Capital, the investment underscores a broader push into China’s consumer sector, building on recent deals in Mixue Group, the bubble tea chain, and luxury retailer SKP. The Hong Kong-based private equity firm, founded in 2010, has traditionally focused on high-growth Chinese companies and now appears to be leveraging that expertise to drive operational efficiency and expansion for Starbucks in lower-tier cities.
The structure mirrors earlier deals by global brands looking to revitalise growth in China through local partnerships. McDonald’s sold 80% of its China and Hong Kong operations in 2017 to a consortium led by CITIC and Carlyle, a transaction widely viewed as a success.
