Retail coffee chain Starbucks (SBUX) has sold a 60% stake in its China business for a reported $4 billion U.S.
In a statement, Starbucks says it is forming a joint venture with Chinese investment firm Boyu Capital to operate Starbucks stores within China.
Under terms of the agreement, Boyu will acquire a 60% stake in Starbucks' retail operations in China, valued at $4 billion U.S.
Starbucks will retain a 40% interest in the joint venture and will own and license the Starbucks brand across the Asian nation of 1.4 billion people.
Starbucks said its business in China is valued at more than $13 billion U.S., including proceeds from the 60% stake being sold to Boyu.
Starbucks entered China nearly 30 years ago and has been credited with growing coffee culture in the country.
China today is Starbucks' second-largest market outside the U.S., with 8,000 retail shops.
But in recent years, Starbucks has struggled in China with competition from domestic start-ups such as Luckin Coffee (LKNCY).
Starbucks' same-store sales in China have fallen for the last two years. As a result, Starbucks has been searching for a partner to help revive its business across China.
Starbucks said the deal with Boyu will help it achieve its goal of growing to 20,000 retail coffee shops in China.
The China headquarters of Starbucks will remain in Shanghai. Boyu and Starbucks said they expect to finalize their deal in the second quarter of 2026.
SBUX stock has declined 12% this year to trade at $80.96 U.S. per share.
