Sources Say Carlyle, EQT, Hongshan, Starbucks Among Final Bidders for China Business
Global investment firms Carlyle Group and EQT, along with regional players Hongshan Capital Group (HSG) and Boyu Capital, are among the final bidders preparing binding proposals to acquire a controlling stake in Starbucks’ China operations, according to five people familiar with the matter.
Three sources added that Starbucks has asked bidders to submit their final offers by early October. All declined to be identified due to the private nature of the discussions.
One source said a deal could be finalized by the end of next month.
Last month, Reuters reported that Starbucks (SBUX.O) had invited nearly 10 potential buyers to submit non-binding bids by early September, with most valuing the China business at up to $5 billion.
Two sources further stated that Starbucks recently decided to sell control of its China operations to the winning bidder, although the exact size of the stake being sold has not been disclosed.
Also in the final bidding round is Chinese private equity firm Primavera Capital, which may partner with one of the four primary bidders, according to two sources.
Based in Seattle, Starbucks reportedly wants to retain control over its coffee roasting facilities in China, the world’s second-largest economy, with one source adding that the move is aimed at ensuring quality control. Another source mentioned that the terms of the deal, including the size of the stake being sold, remain negotiable.
Starbucks has confirmed that it will retain a significant stake in its China operations.
The company has declined to comment on the ongoing sale process, as have EQT and Boyu.
Carlyle (CG.O), Primavera, and HSG—formerly known as Sequoia China—also declined to comment.
Goldman Sachs, which is advising Starbucks on the sale, refused to comment as well.
The sale comes at a time when Starbucks is facing a decline in its market share in China—where more than a fifth of its cafes are located—due to intensifying competition from local rivals.
According to data from Euromonitor International, Starbucks’ market share in China fell from 34% in 2019 to 14% last year.
In response, the chain has introduced several measures, including selective price cuts on non-coffee beverages and an accelerated rollout of new, locally tailored products.
In the quarter ending June 29, same-store sales in China rose 2%, compared to no growth in the previous quarter.
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