Starbucks China "Control Ownership": Boyu Capital acquires 60% stake for 4 billion USD

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Global coffee giant Starbucks has officially announced the sale of control over its China business, a strategic shift that will reshape its development framework in the world’s second largest market.

On Monday, November 3, Starbucks announced that it had agreed to sell a majority stake in its China business to Hong Kong private equity group Boyu Capital for $4 billion. This marks a major strategic adjustment for the American coffee chain giant in its second largest market.

According to the terms of the agreement, Boyu Capital will hold up to 60% equity in Starbucks China’s 8,000 stores, while Starbucks will retain 40% equity and continue to own the Starbucks brand. Starbucks stated the company will license its brand and intellectual property to the new joint venture.

Starbucks revealed that the total value of its China retail business exceeds $13 billion. It has been reported that the company has been seeking investors to sell equity in its China business for several months. Last month, when evaluating bids from five contenders, Boyu Capital and U.S. private equity group Carlyle Group became the main competitors.

This valuation includes proceeds from the sale of equity to Boyu Capital, the value of Starbucks’ retained interests in the joint venture, as well as the value of future licensing fees.

After completing this transaction, Starbucks plans to expand to up to 20,000 stores in China, a figure that will surpass its current stores in North America.

Starbucks CEO Brian Niccol said:

Boyu Capital’s deep local knowledge and professional expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions. We have found a partner who shares our commitment to excellent partner experience and world-class customer service.

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