06:26 AM EST, 11/04/2025 (MT Newswires) -- Starbucks ( SBUX ) agreed to sell a majority stake in its retail operations in China to Boyu Capital as part of a joint venture agreement between the coffee giant and the Chinese private equity firm.

The companies will operate the venture, with Boyu owning an interest of up to 60% in Starbucks' ( SBUX ) Chinese retail business, based on an enterprise value of about $4 billion, the coffee chain said late Monday. Starbucks ( SBUX ) will retain a 40% stake in the venture and continue to own and license its brand and intellectual property in the new entity.

The venture, which requires approval from regulators, is expected to be finalized in the second quarter of 2026. Starbucks' ( SBUX ) shares edged down 0.1% in Tuesday's most recent premarket activity.

"Boyu's deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions," Starbucks ( SBUX ) Chief Executive Brian Niccol said in a statement. "We've found a partner who shares our commitment to a great partner experience and world-class customer service."

The coffee chain expects the overall value of its Chinese retail business to surpass $13 billion, including proceeds from the sale of the majority holding in the joint venture to Boyu. The business will continue to be based in Shanghai, with plans to expand to as many as 20,000 branches from the current 8,000 coffeehouses across the Chinese market, Starbucks ( SBUX ) said.

"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," Boyu Partner Alex Wong said. "Together, we aim to combine Starbucks ( SBUX ) global coffee leadership with Boyu's deep market insights and expertise to accelerate growth and create exceptional experiences for millions of customers."

Last week, Starbucks ( SBUX ) reported fiscal fourth-quarter adjusted earnings of $0.52 per share, down from $0.80 the year before, missing the FactSet-polled consensus of $0.56. Revenue for the quarter improved 5.5% to $9.57 billion, topping the Street's view of $9.33 billion.

Sales in China increased 6% to $831.6 million in the period, while comparable-store sales rebounded to growth of 2% versus a decline of 14% in the prior-year quarter. "We expect to retain a meaningful stake in Starbucks China and remain confident in the long-term growth potential in the region," Niccol said during a conference call on Oct. 29, according to a FactSet transcript.