Starbucks Eyes Stake Sale of China Business Amid Sales Slump
Deal News | Feb 25, 2025 | Zawya
KKR & Co, Fountainvest Partners, and PAG are among the firms expressing interest in acquiring a stake in Starbucks' China division. Chinese companies, including China Resources Holdings and Meituan, have also been approached as potential buyers. Starbucks is reportedly seeking a franchisee-type deal, with the China business valued at over $1 billion. The talks coincide with CEO Brian Niccol's strategy to revitalize the U.S. coffee giant's operations amidst a downturn in both U.S. and Chinese markets. Niccol, who became CEO in August, is initiating a 'Back to Starbucks' plan focused on business streamlining and customer experience improvements. The exact stake size to be sold remains under negotiation. Additionally, Starbucks plans to eliminate 1,100 corporate roles in the U.S. as part of its broader strategy. The company has engaged in informal discussions with various private equity groups and corporations since mid-2024 regarding strategic options for its Chinese arm.
Sectors
- Coffee Retail
- Private Equity
- Food and Beverage
Geography
- China – The primary focus of the article is Starbucks' China business, involving potential Chinese buyers and market conditions.
- United States – Significant as it discusses Starbucks' broader strategic direction under its U.S. headquartered leadership.
Industry
- Coffee Retail – Relevant due to Starbucks being a major player in the global coffee retail market.
- Private Equity – Relevant because of the involvement of private equity firms like KKR, Fountainvest, and PAG in the potential deal.
- Food and Beverage – Pertinent given the broader context of Starbucks' operations within the food and beverage sector.
Financials
- 1 billion – Estimated valuation of Starbucks China in potential franchisee-type deal.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Starbucks | Target Company | Company | U.S.-based coffee company looking to sell a stake in its China operations. |
| KKR & Co | Potential Buyer | Company | A global investment firm showing interest in acquiring a stake in Starbucks China. |
| Fountainvest Partners | Potential Buyer | Company | Private equity firm interested in Starbucks' China stake. |
| PAG | Potential Buyer | Company | Investment group eyeing stake in Starbucks China. |
| China Resources Holdings | Potential Buyer | Company | State-owned conglomerate approached for potential acquisition of Starbucks China stake. |
| Meituan | Potential Buyer | Company | Chinese food delivery giant potentially interested in Starbucks China stake. |
| Rachel Ruggeri | Executive | Person | Starbucks' Executive Vice President and Chief Financial Officer. |
| Brian Niccol | CEO | Person | CEO of Starbucks, overseeing strategic changes and potential China stake sale. |