Starbucks sells most of its Chinese business to private equity company Boyu Capital for 4 billion dollars. The American coffee giant announced on Monday that he would bring nearly 8,000 of his cafes in China to a joint venture in which Boyu Capital would hold up to 60 percent of its shares, reports “ New York Times” . The agreement is scheduled to be concluded at the beginning of next year.
The investment company Boyu Capital was founded by a close associate of erstwhile Chinese president Jiang Zemina Starbucks hopes that sales will benefit from a thorough cognition of the Chinese market, as indicated by the company's statement.
Branch closures announced
In 1999, the American corp opened its first store in China and grew dynamically. According to the report, by the end of June in this country, which traditionally is celebrated for drinking tea, there were 7828 shops; more, due to the fact that 17 230, was only in the native market, in the US. However, since then, Starbucks has struggled with strong competition, losing marketplace shares and revenue. In late September, Starbucks announced plans to close more than 600 stores in China.
Even after the conclusion of the agreement, Starbucks will hold the rights to its brand and intellectual property in China and will so be able to pass it on to another licensees. The American corp estimates the full value of its Chinese business, including proceeds from sales, remaining shares and ten-year licence fees, at over $13 billion.
