Starbucks Corporation (SBUX.US) considers selling its stake in its Chinese business. KKR (KKR.US), China Resources, and others are interested in acquiring it.

According to reports, Starbucks Corporation (SBUX.US) is considering selling part of its stake in its Chinese business, and several acquisition companies and Chinese enterprises have shown strong interest. Sources familiar with the matter said potential buyers include KKR (KKR.US), FountainVest Partners, Pacific Alliance Group (PAG), China Resources Group, and Meituan (03690), among others. This move is aimed at revitalizing Starbucks Corporation's business in its second largest market. The proportion of the stake to be sold has not yet been determined, and Starbucks Corporation may be more inclined to reach franchise agreements with strategic partners. In such transactions, the valuation of Starbucks Corporation in China could exceed $1 billion. The company is planning to reach an agreement by the end of the year. Starbucks Corporation Chief Financial Officer Rachel Ruggeri is expected to visit China for sale negotiations. It is understood that Starbucks Corporation faces fierce competition in the Chinese market from local brands such as Luckin Coffee, Inc. Sponsored ADR Class A (LKNCY.US). Luckin has successfully gained market share with lower-priced products and extensive deployment in lower-tier markets. Since the end of 2024, Starbucks Corporation has been exploring strategic partnerships for its Chinese business. Starbucks Corporation entered the Chinese market in 1999, opening its first store in Beijing. Initially, it entered through a licensing agreement with Beijing Mei Da Coffee Co., Ltd. Subsequently, Starbucks Corporation expanded rapidly, establishing joint ventures with different partners to enter various regions of China. As of 2024, Starbucks Corporation has over 7,596 stores in China. In its expansion process, Starbucks Corporation has focused on localization and innovation to adapt to the preferences of Chinese consumers.