(Reuters) -Starbucks’ China business has attracted offers for a potential stake sale, valuing the coffee chain unit at up to $10 billion, CNBC reported on Wednesday, citing people familiar with the matter.
Asia-based private equity firms Centurium Capital, which holds a stake in Starbucks’ competitor in China, Luckin Coffee, and Hillhouse Capital are among the contenders vying for a stake in the business, the report added.
U.S. peers Carlyle Group and KKR & Co are also potential suitors, CNBC said.
“We are looking for a strategic partner with like-minded values, who shares our vision to provide a premium coffeehouse experience. We remain committed to China and want to retain a meaningful stake in the business,” a Starbucks spokesperson told Reuters.
Hillhouse, Carlyle and KKR did not immediately respond to Reuters’ requests for comment, while Centurium declined to comment. Reuters could not immediately verify the report.
The coffee chain has been working to turn around its business globally under CEO Brian Niccol. In China, it has been exploring options such as strategic partnerships and joint ventures after losing ground to lower-priced local rivals like Luckin Coffee and Cotti Coffee.
Last month, Starbucks lowered prices in China on some products and said it was not currently considering a full sale of the local unit.
There is a possibility Starbucks may retain a 30% stake, with the rest split among a group of buyers, each holding less than 30%, the CNBC report said.
The company was evaluating offers from about 30 domestic and foreign private equity firms in China, the report said.
Bidders could be shortlisted within two months, but the deal is unlikely to be completed this year, as per CNBC.
Starbucks operated 7,594 stores in China, according to its 2024 annual filing.
In its most recent quarterly results, sales in China, its second-largest region, were flat compared to a year ago, pausing four straight quarters of declines.
The company’s shares were up about 1% in New York.
(Reporting by Juveria Tabassum, Anusha Shah and Gnaneshwar Rajan in Bengaluru; Editing by Mrigank Dhaniwala, Leroy Leo and Maju Samuel)
