Carlyle and Boyu emerge as frontrunners to buy Starbucks China

Core Insights - Carlyle and Boyu Capital are leading bidders for a majority stake in Starbucks' operations in mainland China, with the business valued at $4 billion excluding royalties [1][2] - Starbucks is reviewing offers from five bidders, with a decision expected by the end of October 2025 [2] - The total transaction value, including partner investment and future royalties, is projected to exceed $10 billion [3] Group 1: Bidding Process - Five companies submitted binding proposals in early October 2025 [1] - Bidders may form a consortium, with Starbucks potentially retaining up to 49% ownership [4] - The evaluation criteria for bidders include their ability to improve the supply chain and maintain local partnerships, which may favor Chinese firms [4] Group 2: Financial Performance - Starbucks' China division has faced challenges from lower-priced competitors like Luckin Coffee, leading to price reductions on some beverages [2] - For Q3 FY25, Starbucks reported net earnings of $558.3 million, a 47% decline compared to the same period in FY24 [5] - As of June 2025, Starbucks operated 7,828 stores in mainland China, while Luckin Coffee had approximately 26,000 outlets [5] Group 3: Market Context - The divestment comes amid declining revenue for Starbucks in China, attributed to weaker same-store sales [4] - The interest in the sale process reflects confidence in the long-term growth potential of Starbucks in the Chinese market [3]