Starbucks handed control of its China business to a PE firm after 26 years

Starbucks entered China in 1999 and spent 26 years building its second market: 8,011 stores by the end of fiscal 2025, net revenue up nearly 5% that year to about ¥22 billion, 25.5 million active loyalty members. But the market turned to value — Luckin and tea chains fought a low-price war while Starbucks held its premium line. Same-store sales spent quarters under pressure before two consecutive positive ones; in the final quarter transactions rose 9% while same-store sales grew only 2% — more cups, cheaper ones.

The sale process ran for over a year: rumors from the second half of 2024, management roadshows in June 2025 with Hillhouse, Carlyle and CITIC Capital, a September shortlist of Boyu, Carlyle, EQT and Sequoia China. On November 4, 2025, Starbucks announced the deal: Boyu Capital takes up to 60% of the China retail business through a joint venture at an enterprise value of roughly $4 billion, cash- and debt-free; Starbucks keeps 40% and remains owner and licensor of the brand and IP. The headquarters stays in Shanghai, and the JV's stated target is to grow the network toward 20,000 stores.

Starbucks priced the whole arrangement at over $13 billion — proceeds, retained equity and more than a decade of licensing fees. But the operating reality changed: the company that defined premium coffee in China handed its growth engine to a local private-equity playbook aimed at small and medium cities, where the brand's economics never worked under Seattle's direction. CEO Brian Niccol framed it as a like-minded partnership; the arithmetic underneath was a market that stopped paying premium prices.