Starbucks is strengthening its position in China through a major restructuring, announcing a joint venture with Chinese investment firm Boyu Capital to operate its stores in the country. Under the agreement, Boyu will acquire a 60% stake in Starbucks’ China retail operations, valued at $4 billion, while Starbucks will retain a 40% interest and continue to own and license its brand.

The deal gives Starbucks’ China business a combined valuation of more than $13 billion, including the sale proceeds, the value of its remaining stake, and future royalty income.

China has become central to Starbucks’ global strategy since it entered the market nearly three decades ago. With more than 8,000 locations, it remains Starbucks’ largest market outside the United States and has played a key role in shaping modern coffee culture in the country.

However, the company has faced increasing pressure in recent years from fast-growing Chinese chains like Luckin Coffee, which has aggressively captured market share with lower prices and rapid expansion. Starbucks has reported declining same-store sales in China for the past two fiscal years, prompting the search for a strategic partner to help reignite growth.

“Boyu’s deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions,” said Starbucks Chairman and CEO Brian Niccol, noting that the partnership is aligned with the company’s long-term vision of operating 20,000 stores in China.

Boyu Capital partner Alex Wong praised Starbucks’ longstanding presence and appeal in the market, saying the partnership aims to strengthen its local relevance and drive new innovation for Chinese customers.

Starbucks’ China headquarters will remain in Shanghai. Boyu Capital, founded in 2011, operates offices in Shanghai, Hong Kong, Singapore and Beijing.

The companies expect to close the deal in the second quarter of Starbucks’ 2026 fiscal year, which began on September 29. Starbucks’ stock price was unchanged in after-hours trading following the announcement.

The move marks one of Starbucks’ most significant strategic shifts in Asia as it looks to stay competitive in its fastest-evolving market and fuel long-term growth despite intensifying local competition.