BEIJING, Oct 28 — Private equity firm Boyu Capital has reportedly taken the lead in Starbucks Corp’s search for a strategic partner in its China operations, as the global coffee giant works to rejuvenate performance in its second-largest market.
According to sources familiar with the matter, Boyu has outbid other major private equity firms, including Carlyle Group Inc, and is now seen as the most likely buyer of a controlling stake in Starbucks’ China business. The potential transaction could value the unit at over US$4 billion (RM16.8 billion).
Negotiations between Starbucks and Boyu are ongoing and could take several months to finalise, the sources said, noting that the outcome is not yet guaranteed. The deal could also see participation from internet companies as limited partners to help co-finance the acquisition.
Starbucks and Boyu have not commented publicly on the matter, while Carlyle declined to provide a statement.
In August, Bloomberg reported that Starbucks had invited a dozen private equity firms and technology players, including EQT AB, FountainVest Partners, KKR & Co, Hillhouse Investment and Primavera Capital, to express interest in acquiring a stake in its China arm.
Founded in 2011 and headquartered in the Cayman Islands, Boyu Capital manages investments across private equity, public equities, real estate and infrastructure. The firm’s private equity portfolio includes holdings in technology, retail, consumer and healthcare sectors.
Starbucks, which entered China in 1999 with its first store in Beijing, now operates around 7,800 outlets in over 250 mainland cities. Despite its strong presence, it faces stiff competition from local brands such as Luckin Coffee Inc.
Starbucks CEO Brian Niccol has previously said the company plans to maintain a “meaningful” stake in its China business while bringing in new strategic investors. He added in July that more than 20 parties had expressed interest in partnering with the coffee chain as it eyes long-term expansion to as many as 20,000 stores in China.
