Beijing – September 11, 2025 – Qahwa World – Reuters has revealed that Starbucks, the world’s largest coffee chain, is preparing to sell a controlling stake in its China operations in a deal valued at around $5 billion. The decision marks one of the most dramatic turns in the company’s history as slowing sales and intensifying competition from local rivals force the Seattle-based giant to rethink its strategy in its second-largest market.
According to sources cited by Reuters, Starbucks has drawn up a shortlist of five investment firms: Carlyle Group, EQT, HongShan Capital Group (HSG), Boyu Capital, and Primavera Capital. These firms are expected to submit binding bids in early October, with a final agreement anticipated by the end of next month. Financial analysts estimate that Starbucks China will generate between $400 million and $500 million in EBITDA this year, which supports a valuation close to $5 billion.
For years, China was considered the crown jewel of Starbucks’ international growth, with the company expanding to nearly 7,800 stores, representing almost 20% of its global footprint and around 8% of group revenues. But the tide has turned. Data from Euromonitor shows the company’s market share plunged from 34% in 2019 to just 14% in 2024, as local players like Luckin Coffee, Cotti Coffee, and Lucky Cup captured millions of consumers with lower prices, digital apps, and aggressive promotions.
Despite this decline, Starbucks has no plans for a full exit. The company intends to retain a minority stake in its Chinese unit while keeping its coffee roasting facility to safeguard quality standards. This strategy will allow Starbucks to share financial and operational risks with local partners while maintaining a foothold in a market with immense long-term potential.
The shortlisted bidders bring strong experience in food and beverage operations. HSG owns a stake in Heytea, China’s 4,300-store tea chain. Carlyle Group operates South Korea’s 1,700-store A Twosome Place and previously held a stake in McDonald’s China. Primavera Capital has invested in Yum China, EQT formerly owned global foodservice operator SSP, and Boyu Capital is a backer of e-commerce giant Alibaba.
The sale of a controlling stake in Starbucks China represents more than just a financial transaction—it is a strategic turning point. Once viewed as a symbol of Western modernity in China, Starbucks now finds itself forced into a restructuring move to secure its survival in a market where domestic brands are growing at breakneck speed. For investors, the deal offers a rare chance to gain access to a multibillion-dollar coffee market that continues to expand, though marked by fierce competition and price-sensitive consumers.
Binding offers are due in early October, with a final decision expected by the end of the month. Whatever the outcome, one fact is clear: Starbucks is losing the coffee battle in China and entering a new phase of forced partnerships and strategic recalibration that could reshape not only its presence in the country but also the global coffee landscape.
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