HONG KONG, Starbucks’ China operations have drawn initial bids valuing the business at up to US$5 billion (RM21.1 billion), according to people familiar with the matter.
If completed, the deal would rank among the largest divestments of a China unit by a global consumer brand in recent years. The offers, which have not been reported previously, give Starbucks momentum to proceed with the partial sale as it faces slowing economic growth and rising competition from local rivals.
Around 10 prospective buyers were invited to submit non-binding bids in early September, Reuters reported earlier. Most of the offers valued Starbucks China at about 10 times its estimated 2025 earnings before interest, taxes, depreciation and amortisation (Ebitda) of US$400 million to US$500 million, the sources said. At least one bidder proposed a higher multiple in the “high teens.”
This valuation is broadly in line with Starbucks’ biggest competitor in the market, Luckin Coffee, which currently trades at around nine times its projected Ebitda over the next 12 months. Luckin has been rapidly expanding its footprint, especially in smaller Chinese cities, while winning over price-sensitive customers with cheaper drinks.
The bidders’ identities remain confidential, but earlier reports named potential suitors such as private equity firms Carlyle, EQT, Bain Capital, Hillhouse Investment, Primavera Capital and Chinese tech giant Tencent. It is unclear whether all invited parties submitted offers.
A Starbucks spokesperson declined to comment on the valuation or bidding process but pointed to the company’s record international sales growth and a return to revenue growth in China in recent quarters.
Globally, Starbucks trades at an enterprise value of about 20.6 times its trailing 12-month Ebitda, according to LSEG data. The Seattle-based company has a market capitalisation of around US$99 billion.
Starbucks has not disclosed how large a stake it intends to sell, though executives previously ruled out a full divestment. CEO Brian Niccol reiterated in July that the company will retain a “meaningful” stake in its China unit.
China remains critical for Starbucks, housing more than 20% of its global outlets. However, its market share has slipped to 14% in 2023, down from 34% in 2019, according to Euromonitor International. To regain momentum, the company has rolled out more affordable non-coffee beverages and China-specific menu items while accelerating store openings. Comparable-store sales in China rose 2% in the quarter ended June 29, after showing no growth in the prior quarter.
The bidding process is expected to move into a second round where shortlisted candidates will submit binding offers, the sources said, though the exact timeline remains uncertain.
