The coffee giant bets on local expertise to revive growth in its second-largest market.

A Strategic Shift in Asia

Starbucks Corp. announced Tuesday that it will sell a controlling stake in its Chinese operations to Boyu Capital, a Hong Kong–based private-equity firm, in a deal valued at roughly $4 billion.

The move, which hands Boyu Capital a 55 % ownership stake, marks a significant realignment in Starbucks’ global strategy as the company seeks to regain momentum in a market that has become increasingly competitive and unpredictable.

China remains central to Starbucks’ long-term growth,” CEO Brian Niccol said in a statement. “This partnership will allow us to grow faster, with deeper cultural and operational understanding.

Why Starbucks Is Restructuring in China

Starbucks’ sales in China - once its fastest-growing market - have struggled over the past two years amid economic slowdowns, rising local competition, and consumer preference shifts.

Despite operating more than 7,000 stores across 250 cities, the company’s same-store sales in China fell 6 % year-on-year in the latest quarter.

The entry of aggressive domestic chains such as Luckin Coffee and Cotti Coffee - both known for lower prices and localized menus - has eroded Starbucks’ premium dominance.

Analysts say transferring control to Boyu Capital gives Starbucks a locally embedded partner capable of navigating China’s regulatory and market complexities while protecting the brand’s long-term equity.

Deal Structure and Financials

Under the agreement, Boyu Capital will manage day-to-day operations of Starbucks China while Seattle headquarters retains global brand rights and a 45 % stake.

The transaction is expected to close in early 2026, pending regulatory approval. The proceeds, analysts note, will strengthen Starbucks’ balance sheet and support its broader digital and sustainability initiatives.

“Starbucks is choosing localization over control - a smart move given China’s economic environment,” said Jessica Li, consumer-markets strategist at HSBC Global Insights.

A Broader Trend of Localization

The deal aligns with a growing pattern among U.S. multinationals opting to partner with domestic investors in China to retain market access while reducing political risk.

Recent examples include Tesla’s joint research venture in Shanghai and Apple’s partnerships with local supply-chain firms.

For Starbucks, which has faced regulatory scrutiny over data handling and pricing practices, the move may improve relations with Beijing and shore up public trust among Chinese consumers.

Market Reaction

Starbucks shares rose 1.4 % in pre-market trading on Tuesday following the announcement. Analysts at JPMorgan upgraded the stock to Overweight, citing the “strategic clarity” of the restructuring.

Meanwhile, Boyu Capital - which previously invested in Alibaba Group and ByteDance - called the partnership “a vote of confidence in China’s consumer resilience.”

The deal positions Starbucks China for faster expansion in Tier-2 and Tier-3 cities, where coffee consumption remains under-penetrated.

Looking Ahead

If successful, the Boyu partnership could become a model for global consumer brands seeking to operate in China amid shifting economic realities and regulatory oversight.

For now, Starbucks appears to be betting that local control equals long-term growth - even if it means loosening its global grip.