PE Giants Eye $10B Stake in Starbucks China Expansion Deal

Key Takeaways

Sector: Retail.
Geography: China.

Analysis

Starbucks’ China business has become the focus of intense private equity interest, with nearly 30 domestic and international PE firms, including KKR and Carlyle Group, reportedly submitting early proposals for a potential stake valued at up to $10 billion. The deal could become one of China’s largest consumer-sector transactions in 2025.

Sources close to the matter say Hillhouse Capital and Centurium Capital—which owns a majority of rival Luckin Coffee—are also among the suitors. While Starbucks has confirmed it intends to retain a meaningful stake, potentially around 30%, the remaining equity could be distributed across a consortium of investors, none holding a controlling share.

The US-based coffee giant initiated discussions in late 2024, seeking strategic capital partners that align with its long-term values amid slowing consumer demand and rising competition in the Chinese market. With over 7,700 stores in the country, China is Starbucks' second-largest market after the United States, contributing over 8% of its global revenue.

If completed, the transaction would grant private equity buyers rare access to a globally recognized consumer brand at significant scale within Asia’s largest coffee market. However, insiders stress that Starbucks is under no obligation to sell, and may walk away if offers fail to meet its internal valuation targets.

Goldman Sachs is advising on the process. A shortlist of final bidders is expected within two months, though a full closing could take longer depending on negotiations and regulatory approvals.

The proposed deal underscores the growing appetite among private equity firms for consumer-facing assets in China, particularly as multinational brands reevaluate local partnerships in light of macroeconomic headwinds and local competition.