In one of the most significant divestitures of a China division by a multinational consumer company in recent memory, Starbucks announced on Monday that it would sell control of its China operations to investment firm Boyu Capital in a $4 billion deal.
The firms will run a joint venture under the terms of the arrangement, with Boyu owning up to 60% of Starbucks’ retail operations in China. According to the companies, Starbucks will continue to own and license the brand and intellectual property to the new company, and it will keep a 40% stake in the joint venture.
Including the profits from the sale of a controlling stake in the joint venture to Boyu and the value of Starbucks’ retained interest in the venture, Starbucks anticipates that its China retail operation will be worth more than $13 billion.
Due to intense competition from regional coffee companies that provide less expensive goods in the midst of an economic downturn that has altered consumer behavior, Starbucks is divesting its market share in China. Which accounts for more than 20 per cent of its global stores, dropped to 14 per cent in 2024, down from 34 per cent in 2019.
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