Starbucks Sells 60% of China Unit to Boyu at $4 Billion Valuation
Market commentary signals relief over reduced China exposure despite disappointment with the headline price.
Overview
- Starbucks announced the sale of a majority stake in its China retail business, transferring 60% ownership to Boyu.
- The company said it expects the total value of the China retail operation to exceed $13 billion when factoring its retained stake and future licensing income.
- Shares were pressured following the earnings release and then fell again after the China deal’s $4 billion headline valuation was disclosed.
- Jim Cramer expressed confidence in CEO Brian Niccol’s turnaround but said he would not buy shares until they reach $75 and suggested the stock may move to that level.
- Cramer welcomed the reduced China risk for Starbucks and noted the business had previously suffered a 14% decline in same-store sales in the market.