Starbucks sells 60% stake in China business in $4 billion deal

Starbucks said Monday it is forming a joint venture with Chinese investment firm Boyu Capital to operate Starbucks stores in China.

Under the agreement, Boyu will pay $4 billion to acquire a 60% interest in Starbucks’ retail operations in China. Starbucks will retain a 40% interest in the joint venture and will own and license the Starbucks brand.

Starbucks entered China almost 30 years ago, and has been credited with growing coffee culture in the country. China is Starbucks’ second-largest market outside the U.S., with 8,000 locations.

But in recent years, the Seattle coffee giant has struggled in China with cheap, fast-growing Chinese startups like Luckin Coffee.

As a result, Starbucks has been looking for a partner to help it grow its business in China, particularly in smaller cities. In July, Starbucks Chairman and CEO Brian Niccol said the company was evaluating around 20 offers for a stake in the company.