Starbucks forms a joint venture with Boyu Capital to operate its locations in China, with Boyu paying $4 billion for a 60% stake. The deal values Starbucks’ China business at over $13 billion. Starbucks aims to tap into the vast market opportunity in China, where it has roughly 8,000 locations.

Starbucks’ sales in China have faced challenges due to pandemic-related restrictions and increased competition from Luckin Coffee. While same-store sales in China increased 2% in the fiscal fourth quarter, Starbucks has seen lower profits as it competes with local rivals through discounting. Executives remain optimistic about long-term prospects in China.

China’s market has attracted U.S. companies like Burger King and McDonald’s, both of which have made strategic moves in response to economic slowdown and heightened competition. Burger King parent company Restaurant Brands International bought back its China business from TFI Asia Holdings, while McDonald’s increased its stake in its China business to capitalize on growth opportunities.

Read more at CNBC: Starbucks to form joint venture with Boyu Capital to run China business