Why Starbucks Chose Local PE Firm to Help Revive China Business

Starbucks Corp. decided to sell a majority stake of its struggling China unit to Boyu Capital after the Chinese private equity firm convinced the coffee chain it could grow the business with its existing management team, according to people familiar with the process.

Boyu outgunned rival bidders for Starbucks’ second-largest business by also playing up its familiarity with the giant Chinese market, the people said.

After bursting into Beijing in 1999 and then fanning out across the country with thousands more stores, Starbucks’ breakneck expansion in a nation known for a fondness of tea was ambushed by the emergence of ...