Starbucks transfers control of its coffeehouse network in China
Starbucks has announced an agreement with investment firm Boyu Capital to establish a joint venture to manage its retail operations in China, Kazinform News Agency reports.
According to the terms of the agreement, Boyu Capital will acquire up to a 60% stake in Starbucks’ retail operations in China, while Starbucks will retain 40% of the shares and continue to own the brand and intellectual property, licensing them to the new entity. Boyu will purchase its stake based on an enterprise valuation of around $4 billion, excluding cash and debt.
Starbucks values its entire China business at over $13 billion, including proceeds from the sale of the controlling stake, the value of its retained share, and licensing royalties expected over the next decade.
The joint venture’s headquarters will remain in Shanghai. It will continue to operate 8,000 Starbucks stores, with plans to expand the number to 20,000 in the future.
Starbucks has been operating in China for more than 26 years and considers it a strategically important market after the United States. The partnership with Boyu Capital, an investor with experience in consumer, technology and energy sectors, aims to combine Starbucks’ global coffee leadership with deep local expertise in the Chinese market.
Earlier, it was reported that Starbucks would cut around 900 administrative positions and close approximately 200 stores in North America as part of a business restructuring plan.
