Introduction:Rumors of Starbucks’ potential divestment of its China business have resurfaced, with over 30 prospective buyers submitting bids in the range of $5 billion to $10 billion. Prominent players such as Hillhouse Capital, Carlyle Group, and Luckin Coffee’s major shareholder, Grand Summit Capital, have all joined the fray. As Starbucks faces a sharp decline in market share from 34% to 14%, will it adjust its equity strategy? This article delves into the evolving landscape of China’s coffee market behind the bidding war, and how potential deals may impact consumers.
News of the potential sale of Starbucks’ China business continues to draw market attention, with more than 30 interested parties having submitted bids so far, valuing the stake between $5 billion and $10 billion (approximately RMB 35.8 billion to RMB 71.7 billion). Well-known institutions including Hillhouse Capital, Carlyle Group, and KKR have shown strong interest, while Grand Summit Capital, the major shareholder of Luckin Coffee, is also in the mix, adding further complexity to the bidding battle.
Given that Starbucks’ current market capitalization is around $108 billion, and its China operations account for over 8% of its global revenue, the market generally believes a reasonable valuation for its China business should be no less than $9 billion (approximately RMB 64.6 billion). Reports indicate that several investors have already submitted formal proposals to Starbucks, including some new faces such as Hillhouse and Carlyle—both with extensive M&A experience.
While Starbucks has officially emphasized that it is “not considering a full sale of its China business” and remains confident in the long-term prospects of the market, it has hinted at the possibility of adjusting its stake, retaining around 30% of the shares while distributing the rest among multiple buyers—with no single buyer holding more than 30%. However, most bidders are more inclined to acquire controlling interest to facilitate future strategic operations, prompting Starbucks to reconsider whether to offer a higher percentage of shares.
It is understood that Starbucks is carefully evaluating the details of each bidder’s offer, the proposed deal structure, and plans for future value creation. The initial screening is expected to be completed within two months, but finalizing the entire transaction by the end of this year remains quite challenging. Industry insiders note that firms like Hillhouse, KKR, and Carlyle have been actively pursuing the deal, whereas although Grand Summit Capital has the successful Luckin case, its chances of securing Starbucks’ China stake are still considered relatively low.
With the rapid rise of domestic coffee brands like Luckin, Starbucks’ market share in China has plummeted sharply from 34% in 2019 to just 14% in 2024. Same-store sales have declined for four consecutive quarters, and average spending per customer has weakened for ten straight quarters. This market environment has prompted Starbucks to rethink its development strategy in China.
Faced with intensifying competition and shifting consumer habits, Starbucks China recently reiterated its long-term confidence in the market and stated that it is actively seeking “strategic partners who share common values,” aiming to continue delivering a premium café experience through collaboration. The company emphasized that any equity transaction must take into account the interests of both the company and its employees, and align with the brand’s long-term development direction.
The industry widely believes that this equity shift not only concerns Starbucks’ future positioning in China, but could also reshape the competitive dynamics of the overall coffee market. For consumers, regardless of who ultimately takes over, adjustments in service quality, product innovation, and pricing strategies will be key areas to watch.
This power struggle over control of Starbucks’ China operations not only shakes the nerves of the global coffee market, but also brings new considerations for local consumers and industry players: in an increasingly competitive environment, how will brand value, localization strategies, and capital operations be balanced? The answers may soon be revealed.
The above content is compiled by CoffeeHunters, a coffee news website.
