Starbucks Corp is actively exploring a potential strategic revamp of its operations in China and has begun engaging private equity firms, tech investors, and other strategic players as part of a process that may lead to a partial stake sale, according to a report by Bloomberg.
The reports cites unnamed people familiar with the matter as revealing that the Seattle-based coffee giant has reportedly hired a financial adviser to circulate initial information to potential suitors, inviting feedback on how to drive growth in its China unit—its second-largest global market with over 7,750 stores and quarterly revenue of $740m as of March. A transaction could value the business at several billion dollars, sources said, though Starbucks may ultimately opt against a deal.
The move places Starbucks in line with a growing trend of Western consumer giants turning to private equity in China to unlock localised growth, tap into capital markets expertise, and mitigate operational risk in a volatile macroeconomic environment. McDonald’s and Yum! Brands previously monetised stakes in their China businesses through partnerships with Carlyle Group and Primavera Capital, respectively—deals that also enhanced localisation and accelerated store rollout strategies.
Sources suggest Starbucks is weighing options that could include bringing on a minority PE partner, forming a joint venture, or creating a region-specific growth platform to fend off intensifying competition from Luckin Coffee and Cotti Coffee – both fast-scaling local rivals.
