Core Viewpoint - Starbucks is in the final negotiation stage for the sale of its China business, with private equity (PE) firms as the main candidates, indicating a strategic shift away from venture capital (VC) firms [6][10]. Group 1: Sale Process and Candidates - Starbucks has shortlisted several PE firms, including Hillhouse Capital, Carlyle Group, EQT, Sequoia China, and Primavera Capital, for the sale of its China business, with a decision expected by the end of October [6]. - Notably, major VC firms like Tencent and JD.com, which were rumored to be interested, did not make it to the final round, highlighting a preference for PE firms [6][7]. Group 2: Shareholding Structure - Starbucks plans to retain a 30% stake in its China operations, with the remaining 70% to be distributed among multiple buyers, ensuring no single buyer holds more than 30% [6][7]. - This structure allows Starbucks to maintain influence and flexibility in its operations while securing necessary funding and resources [6][7]. Group 3: Comparison with Competitors - The case of McDonald's, which successfully sold 80% of its China business in 2017, serves as a model for Starbucks, demonstrating how local partnerships can accelerate growth and enhance brand vitality [9][10]. - McDonald's saw significant expansion and improved profitability after introducing local capital, which could be a beneficial strategy for Starbucks as well [9][10]. Group 4: PE vs. VC Considerations - PE firms focus on financial returns and operational efficiency, making them a better fit for Starbucks, which aims to maintain its independent operational style [7][10]. - In contrast, VC firms often seek greater control for strategic alignment, which could conflict with Starbucks' goals [7][10]. Group 5: Market Dynamics - The high level of digitalization in the Chinese market, dominated by major internet platforms, poses risks for Starbucks if it were to partner with VC firms, potentially affecting its collaborations with other platforms [7][8]. - The performance of competitors like Tims China, which has struggled financially, further underscores the limited strategic benefits of VC involvement for Starbucks [8].