Starbucks plans to sell control of its China business, Carlyle and a number of institutions enter the bidding for the "final battle"

According to the Zhitong Finance APP, five informed sources said that major global investment giants Carlyle Group and EQT, as well as important regional players HongShan Capital Group (HSG) and Boyu Capital, are preparing to submit final bids for control of Starbucks' business in China. These sources indicated that the final bids for Starbucks China are expected to be announced in early October, with Starbucks planning to sell control of its Chinese operations.

Three of the sources stated that Starbucks has requested them to submit binding bids in early October. One of them added that an agreement could be reached by the end of next month at the latest.

Media reported last month that Starbucks (SBUX.US) had invited about 10 potential buyers to submit non-binding bids in early September, with most valuations for Starbucks' Chinese market business reaching up to $5 billion.

Two informed sources said that Starbucks has recently decided to sell control of its Chinese market business to the final buyer, although the scale of the equity being sold has not been disclosed.

Two sources mentioned that the final round of bidders also includes Chinese private equity firm Primavera Capital, which may form a consortium with one of the four main bidders.

Sources indicated that the Seattle-based global coffee giant is seeking to retain control of its coffee bean roasting facilities within the world's second-largest economy, with one person adding that this is for quality control considerations.

Sources stated that the terms of the deal structure, including the scale of the equity to be sold, remain negotiable.

Starbucks has indicated that the company will maintain a meaningful stake in its Chinese business.

Starbucks did not immediately comment on the ongoing sale process, and EQT and Boyu also did not comment. Carlyle, Primavera Capital, and HSG all declined to comment. Goldman Sachs, acting as an advisor for the sale, also refused to comment.

At the time of this sale, Starbucks is facing a sharp decline in market share in China—where over one-fifth of its global coffee shops are located—due to intensified local competition.

According to Euromonitor International statistics, its market share plummeted from 34% in 2019 to 14% last year. To address these challenges, the global coffee chain has since taken measures such as lowering prices on some non-coffee beverages in the Chinese market and accelerating the launch of new localized products.

For the quarter ending June 29, Starbucks China unexpectedly achieved a same-store sales growth of 2%, compared to zero growth in the previous quarter.

Nicole Strives to Fully Reverse Starbucks' Performance Decline

Facing multiple pressures such as rising coffee bean prices and the heavy burden of Trump's tariff policies, Starbucks, under the leadership of Nicole, is working hard to reverse the significant decline in same-store sales over six consecutive quarters. In addition to making Starbucks-branded cafes more attractive to consumers, newly appointed CEO Brian Nicole is attempting to continuously update the Starbucks menu, increase staffing at stores, and introduce key technologies to simplify the ordering process On the operational front, so far, Laxman Narasimhan has implemented a series of significant personnel changes, from tightening the dress code for baristas to laying off approximately 1,100 company employees and requiring some employees to relocate to Seattle. Starbucks has also granted certain executives stock awards with a target value of $6 million, which are expected to be realized as they push for a comprehensive business transformation while controlling costs.

Under Narasimhan's leadership, Starbucks is currently taking various proactive measures to boost sales. For example, the return of the Pumpkin Spice Latte, renovations of stores, and upgrades to the mobile app and mobile ordering system to enhance customer experience, as well as the implementation of the "Green Apron Service" model, aimed at standardizing and making the transaction process, sales, and customer service times in its coffee shops consistent and repeatable. Starbucks stated that stores that have implemented this model have seen improvements in transaction volume, sales, and customer service times.

From a valuation perspective, Starbucks is not cheap; according to analysts' forecasts for fiscal year 2026 (ending September 2026), its expected price-to-earnings ratio is about 32 times. Analysts believe the company is on track to turn a profit, and this process is underway. However, considering the enormous costs required for this turnaround and the stock's valuation level, some Wall Street firms have indicated that investors should remain cautious. Citigroup, a major Wall Street firm, lowered its target price for Starbucks from $100 to $99 in a research report to investors, giving it a "neutral" cautious rating