Carlyle Group, EQT, HongShan Capital, Boyu Capital, and Primavera Capital have emerged as the final bidders for a controlling stake in Starbucks Corp (NASDAQ:SBUX, ETR:SRB)’ China operations, according to sources cited by Reuters.
Binding offers are due in early October, with a potential agreement expected by the end of the month, people familiar with the matter said.
The Seattle-based coffee chain operates more than a fifth of its global stores in China and is looking to bring in a new private equity backer to help revive growth in what it considers its most important international market.
Initial bids last month valued the business at up to $5 billion.
Starbucks has agreed to sell control of its China unit but intends to maintain a meaningful stake, according to the sources.
The company will also retain its coffee bean roasting facility in the country to preserve quality control. The exact size of the stake to be sold remains under negotiation.
The move comes as Starbucks faces mounting competition from local coffee chains. Its market share in China dropped to 14% in 2024 from 34% in 2019, according to Euromonitor data.
The company has responded with price reductions on certain non-coffee drinks and faster rollouts of localized offerings, contributing to a 2% increase in comparable-store sales in the latest quarter.
Primavera Capital is expected to participate through a partnership with a co-investor, the sources said.
Carlyle, EQT, and HongShan declined to comment. Goldman Sachs, which is advising Starbucks on the transaction, also declined to comment.
Shares of Starbucks added 0.8% at about $83 on Thursday morning.