Starbucks China Draws Strong Investor Interest with Valuation Up to $10 Billion
Starbucks’ operations in China have attracted strong interest from both domestic and international private equity firms, with preliminary offers valuing the business as high as $10 billion. According to multiple sources familiar with the matter, nearly 30 investment firms have submitted non-binding proposals to acquire a stake in the coffee chain’s China unit.
The indicative bids currently on the table reflect valuations ranging from $5 billion to $10 billion. Sources suggest that the final agreement is likely to lean toward the upper end of that range. This interest comes at a time when Starbucks’ total market capitalization stands at approximately $108 billion, with its China operations accounting for over 8 percent of its global revenue. Based on these figures, some analysts consider a valuation of around $9 billion to be reasonable.
Starbucks is reportedly in the process of reviewing proposals, including deal structures and post-sale value creation plans, before creating a shortlist of potential buyers. This process could be completed within two months, but a finalized transaction is not expected before the end of the year.
There is speculation that Starbucks may retain a minority stake of around 30 percent, while the remaining shares could be distributed among several investors, each holding less than 30 percent. Among the interested parties are well-known firms such as Centurium Capital, Hillhouse Capital, Carlyle Group, and KKR, though the coffee chain has yet to confirm official contenders.
The surge in investor interest is taking place against a backdrop of slow deal activity in China’s private equity sector, driven by economic uncertainty. Investment managers are under growing pressure to deploy available capital and demonstrate deal-making capability. According to one industry veteran, simply being invited to bid on a deal of this scale helps firms validate their relevance in a more challenging environment.
Goldman Sachs is reportedly advising on the transaction and is coordinating the process. However, sources caution that the deal remains fluid. Starbucks may choose to delay or even cancel the sale if bids fall short of the company’s valuation expectations. As one insider put it, nothing is final until the very end of the process.
This move echoes a similar strategy employed by McDonald’s, which sold a controlling stake in its China operations in 2017. That transaction valued the business at $2.1 billion, with Chinese state-owned firm Citic Capital and Carlyle acquiring the majority, while McDonald’s retained a minority interest. The fast-food giant later increased its ownership by repurchasing Carlyle’s stake at a significantly higher valuation.
Starbucks, too, appears likely to keep a foothold in its China business to maintain influence and benefit from potential future growth. However, the exact size of the stake being offered remains undisclosed. A company spokesperson recently clarified that a full exit is not under consideration.
The coffee chain faces mounting competition and operational challenges in the Chinese market. Local rivals, including Luckin Coffee and various milk tea and bubble tea brands, have gained traction, especially among price-sensitive consumers. In response, Starbucks introduced its first price cut in China this June, lowering the cost of over 20 iced and tea-based drinks by an average of 5 yuan. The move also included new sugar-free options to cater to evolving customer preferences.
Despite these efforts, the company has seen its market share shrink, falling from 34 percent in 2019 to just 14 percent in 2024. Same-store sales in China have remained flat in recent quarters, underlining the need for strategic realignment.
Industry analysts suggest that partnering with investors who have strong local knowledge could help Starbucks accelerate its adaptation to the Chinese market. Cultural relevance, speed to market, and cost efficiency are becoming increasingly critical in capturing consumer interest.
A leadership change last year also signals a renewed focus on the region. Molly Liu, formerly head of Starbucks China’s digital division, now leads the company’s operations in the country. Observers believe her appointment may reflect a broader shift toward local empowerment and faster decision-making.
In a market undergoing rapid transformation, Starbucks’ next moves in China may serve as a model for other foreign firms looking to stay competitive in an evolving landscape.