Starbucks (NASDAQ:SBUX) has asked shortlisted bidders to submit non-binding offers for a stake in its China business within two weeks, Reuters reported, citing two sources.
The company invited firms including Carlyle (CG), EQT (OTCPK:EQBBF), Hillhouse Investment and Primavera Capital to attend management presentations detailing financial and operational details of its China business, the sources said, adding that Tencent (OTCPK:TCEHY), KKR (KKR), and Bain Capital make up other potential bidders.
Starbucks (NASDAQ:SBUX) reportedly began a formal sale process for its China unit in May, asking potential buyers to submit responses to a questionnaire. The company said at the time that it was not pursuing a full sale. In July, Starbucks shortlisted up to 10 bidders and signed NDAs before granting access to financial and operational data, sources said.
The stake sale, expected to value the unit at up to $10 billion, aims to revive a business hit by slowing growth and rising competition from local rivals like Luckin Coffee (OTCPK:LKNCY). The coffee chain’s China market share fell to 14% last year from 34% in 2019, according to data from market researcher Euromonitor International.
Starbucks (SBUX) has been in informal talks with potential buyers since late last year and is targeting a deal by year-end, sources previously told Reuters. CEO Brian Niccol said on last month’s earnings call that Starbucks has drawn interest from over 20 parties and is reviewing options. “We remain committed to our China business and want to retain a meaningful stake… We will only enter a transaction if it makes sense for Starbucks,” Niccol said.