Starbucks (SBUX) has agreed to sell a majority stake in its China business to private equity firm Boyu Capital at a $4 billion enterprise value, it said in a filing on Monday.
Starbucks Coffee said it has agreed to form a joint venture with Boyu Capital to operate its retail business in China. Under the terms of the deal, Boyu will hold up to a 60% stake in the venture, with Starbucks retaining the remainder.
Starbucks expects the total value of its China retail business to exceed $13 billion, composed of three sources: proceeds from the sale of a controlling interest, the value of Starbucks’ retained interest in the JV, and the net present value of ongoing licensing economics payable to Starbucks over the next decade or longer.
