Key Takeaways
- Sector: Retail.
- Geography: China.
Analysis
Starbucks has advanced to the second stage of the strategic investment process for its operations in China. Several major private equity firms, including KKR, Carlyle Group, and EQT, are among the shortlisted bidders, according to a Bloomberg report.
Unnamed sources who are privy to the matter disclosed that FountainVest, Boyu Capital, Primavera Capital, and Hillhouse Investment have also made the cut for the shortlist. They join tech giants JD.com Inc and Tencent Holdings in the running for the lucrative opportunity.
The Seattle-based coffee chain is in search of a local partner to bolster the long-term growth of its China operations, which is its second-largest market globally. The initiative is less about raising funds and more focused on securing operational expertise, optimizing the supply chain, and boosting digital engagement in the country, as explained by Starbucks CEO Brian Niccol.
In a recent earnings call, Niccol stressed that the process is "not about capital" but rather about ensuring the future strength of the Starbucks brand in the Chinese market. The coffee giant plans to expand its store network in China from about 7,800 locations to over 20,000 in the upcoming years.
Insiders close to the deal report that over 20 potential investors presented initial proposals, with around a dozen advancing to the next stage. Those who made it to this phase will gain access to Starbucks China's financials to conduct due diligence and prepare formal bids.