Starbucks has agreed to sell a 60% stake in its China business to Boyu Capital in a deal valued at $4bn, creating a joint venture that will manage the coffee giant’s nearly 8,000 stores across the country, the New York Times reports.

The U.S. company will retain a 40% stake in the new entity and continue to own and license its brand and intellectual property. Starbucks said the transaction, expected to close in early 2026, values its overall China retail operations at more than $13bn when including sale proceeds, its retained interest, and projected licensing revenue over the next decade.

“This approach allows us to combine the strength of the Starbucks brand, our coffee expertise, and our partner culture with Boyu’s deep knowledge of the China market and local expertise,” said CEO Brian Niccol.

For Boyu Capital, one of China’s largest private equity firms with offices in Shanghai, Hong Kong, Beijing, and Singapore, the deal represents a major step into consumer and retail investments with global brand exposure. The firm, founded by the grandson of former Chinese president Jiang Zemin, has been steadily increasing its footprint in cross-border partnerships.

China remains Starbucks’ second-largest market globally, accounting for roughly 8% of revenue, but competition has intensified as local coffee and tea chains such as Luckin Coffee, ChaGee, and HeyTea have captured market share through pricing and digital loyalty programs.

The move comes as Starbucks faces a broader turnaround effort. Despite a 5.5% increase in quarterly global revenue to $9.6bn, its net income fell 85% to $133m, reflecting slower growth in China and restructuring costs in the U.S.

The Boyu partnership marks a strategic reset for Starbucks, providing access to local expertise and capital while reducing exposure in a market that has become increasingly competitive and cost-sensitive.

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