Starbucks to sell control of China business in $4 billion deal
STORY: :: FileStarbucks will sell control of its China operations to investment firm Boyu Capital—one of the most valuable divestments of a China unit by a global consumer brand in recent years. The $4 billion deal gives Boyu up to 60% of Starbucks’ retail business in China, while Starbucks keeps 40% and continues to own and license its brand and intellectual property to the new entity, the companies said.Starbucks said it expects proceeds from the sale, combined with its retained stake and licensing over the next decade, to top $13 billion. The company's shares rose about 3% in after-hours trading.The move comes as Starbucks loses ground to cheaper local rivals and faces a slowing economy that’s making consumers more price-sensitive. Rival Luckin now operates more than 20,000 franchise stores, far ahead of the 7,800 stores operated by Starbucks, though its model focuses on takeaway and delivery. Starbucks’ comparable-store sales in China rose 2% in the quarter that ended on June 29, after flat growth the previous quarter.Starbucks also flagged that rising U.S.-China tensions pose risks, including tariffs, boycotts, and growing political sensitivities in China.Starbucks is not the first U.S. brand to divest or partially divest its operations in China.McDonald’s, for example, sold a majority stake in its China and Hong Kong operations to investors, a tie-up widely seen as successful.
STORY: :: FileStarbucks will sell control of its China operations to investment firm Boyu Capital—one of the most valuable divestments of a China unit by a global consumer brand in recent years. The $4 billion deal gives Boyu up to 60% of Starbucks’ retail business in China, while Starbucks keeps 40% and continues to own and license its brand and intellectual property to the new entity, the companies said.Starbucks said it expects proceeds from the sale, combined with its retained stake and licensing over the next decade, to top $13 billion. The company's shares rose about 3% in after-hours trading.The move comes as Starbucks loses ground to cheaper local rivals and faces a slowing economy that’s making consumers more price-sensitive. Rival Luckin now operates more than 20,000 franchise stores, far ahead of the 7,800 stores operated by Starbucks, though its model focuses on takeaway and delivery. Starbucks’ comparable-store sales in China rose 2% in the quarter that ended on June 29, after flat growth the previous quarter.Starbucks also flagged that rising U.S.-China tensions pose risks, including tariffs, boycotts, and growing political sensitivities in China.Starbucks is not the first U.S. brand to divest or partially divest its operations in China.McDonald’s, for example, sold a majority stake in its China and Hong Kong operations to investors, a tie-up widely seen as successful.
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