Beijing, Nov 7 (2025) –Starbucks has struck a deal to offload a 60% controlling interest in its Chinese operations to private equity firm Boyu Capital, valuing the unit at $13 billion. The agreement underscores the Seattle-based chain’s strategic shift amid fierce competition from homegrown rivals like Luckin Coffee, which has rapidly expanded its footprint in the region.
Under the terms unveiled Monday, Starbucks will retain 40% ownershipand keep full rights to its brand in China. The partnership is among the most significant involving a multinational consumer giant’s Chinese arm in recent memory. In a statement, Starbucks called the collaboration a “milestone”for its China strategy, leveraging Boyu’s local market insights alongside its own global brand strength, coffee craftsmanship, and employee-focused culture.
The Chinese business—headquartered in Shanghai—will continue operating its current 8,000 storeswith an aggressive target to grow to 20,000 locations nationwide. Despite entering China in 1999, Starbucks has grappled with declining salesdue to pandemic disruptions, sluggish consumer demand, and the rise of domestic competitors. Luckin, in particular, has undercut Starbucks with aggressive pricing and promotions while surpassing its store count.
Starbucks’ China struggles reflect broader challenges for Western brands. Yum!’s KFC and Pizza Hutwere spun off in 2016, while others like Gapand Uberhave exited or scaled back operations.
The transaction aligns with CEO Brian Niccol’sturnaround efforts since taking the helm last year. His playbook includes menu revamps, staffing expansions, and reduced reliance on automation. The Boyu deal, expected to close next year, will also spur localized drink innovations and digital servicestailored to Chinese tastes.
By tapping into Boyu’s local expertise, Starbucks is betting on a “China-for-China”approach to reignite growth in the world’s second-largest economy—despite its recent hurdles.
