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Starbucks has agreed to sell a majority stake in its China business to private equity group Boyu Capital for $4bn, as it aims to more than double its number of cafés in the country.
The coffee shop chain on Monday said Hong Kong-based Boyu will hold an up to 60 per cent interest in its 8,000 stores in China, while Starbucks will have a 40 per cent stake and continue to own the Starbucks brand. The US company will license the brand and intellectual property to the new venture, Starbucks said.
Starbucks has for months been sounding out investors to sell a stake in its China business, its second-largest market after the US. As it evaluated offers from five bidders last month, Boyu and US-based private equity group Carlyle emerged as the leading contenders, the Financial Times reported last month.
The company said the total value of its China retail business will be more than $13bn, which includes proceeds from the sale to Boyu, the value of its retained interest in their joint venture and the future value of licensing payments.
Starbucks aims to expand to as many as 20,000 stores in China — a number that would top its current store count in North America.
Brian Niccol, chief executive of Starbucks, said: “Boyu’s deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions. We’ve found a partner who shares our commitment to a great partner experience and world class customer service.”
This is a developing story.
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