Starbucks Lands USD4B Deal with Chinese Boyu Capital
(MENAFN) Starbucks Coffee Company revealed Tuesday a transformative partnership with Boyu Capital, a prominent alternative investment firm, to restructure its Chinese retail operations through a newly formed joint venture.
The agreement grants Boyu a controlling stake of up to 60 percent in Starbucks' China retail business, valued at approximately 4 billion U.S. dollars on a cash-free, debt-free basis. The Seattle-based coffee chain will maintain the remaining 40-percent ownership while retaining full control of the Starbucks brand, licensing its trademark and intellectual property to the joint venture.
"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 Brian Niccol, chairman and chief executive officer, Starbucks Coffee Company.
The venture will maintain its headquarters in Shanghai and assume control of 8,000 Starbucks locations currently operating across mainland China. Both partners have outlined ambitious expansion plans, targeting up to 20,000 stores in the region over the coming years.
Starbucks projects the total valuation of its China retail operations will surpass 13 billion U.S. dollars following the joint venture's establishment.
"Starbucks has built an iconic brand and a deep connection with Chinese consumers over the past 26 years. This partnership reflects our shared belief in the enduring strength of that brand and the opportunity to bring even greater innovation and local relevance to customers across China," said Alex Wong, partner at Boyu Capital.
The coffee giant first entered mainland China in 1999 with a Beijing location. Boyu, established in 2011, operates as a globally-positioned alternative asset management firm with extensive Chinese market experience.
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