Starbucks’ China operations have drawn non-binding offers from PE firms, including Carlyle, EQT, Hillhouse, Primavera Capital, Bain Capital and KKR, that value the business at around $5bn, according to a report by Reuters citing unnamed sources familiar with the matter.
The Seattle-headquartered coffee chain invited about 10 potential buyers to submit bids by early September with most offers valuing the unit at roughly 10x projected 2025 EBITDA of $400m–$500m, while at least one bidder proposed a multiple in the high teens.
It remains unclear which bidders progressed, or how large a stake Starbucks is prepared to sell. The company has previously ruled out a full exit, with CEO Brian Niccol stressing the group would retain a “meaningful stake” in the business.
Starbucks has seen its market share in China shrink from 34% in 2019 to 14% last year, according to Euromonitor, as Luckin Coffee expands aggressively with lower prices and wider coverage in smaller cities. To respond, Starbucks has cut prices on certain drinks and accelerated launches of China-specific products, while comparable-store sales in the market grew 2% in the latest quarter.
Despite increased competition, bidders are attracted to the scale of the franchise, which accounts for more than a fifth of Starbucks’ global stores. At about $5bn, the valuation puts Starbucks China broadly in line with peers such as Luckin, which trades at around 9x forward EBITDA, but still well below Starbucks’ global business multiple of about 19x.
A formal sale process is expected to follow the initial round, with a smaller group of bidders invited to submit binding offers.
