Starbucks may sell China business after major bid from huge new rival | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

“If you can’t beat them, join them,” the saying goes, or in the case of one major company, give a potential rival a stake in your business.

Starbucks has been suffering from a significant slowdown in its overall business, especially in the U.S., which has caused it to lose market share in its most prominent region.

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Its China business, on the other hand, has shown growth potential.

Although its comparable sales were flat during the second quarter of fiscal 2025, it’s an improvement after decreasing for four consecutive quarters, driven by a 4% rise in transactions.

The coffee giant closed the quarter ending March 2025 with 7,758 China stores, which is about 20% of its total store portfolio.

This region also accounts for around 8% of its total global revenue, valuing its China business at up to $10 billion.

Starbucks receives major bids for a stake in its China business.

Image source&colon; Cheng Xin/Getty Images

Starbucks may sell a stake in its China business

Starbucks (SBUX) has received interest from potential investors regarding a possible stake sale of its China business, as first reported by CNBC.

Nearly 30 U.S. and international private equity firms have already submitted non-binding offers ranging from $5 billion to $10 billion.

Starbucks is currently evaluating the offers, and the short-listing could be concluded over the next two months. However, a final decision is unlikely to be reached by the end of this year.

Although the coffee giant is entertaining bidders, the company may continue to hold a prominent stake in the business by keeping 30% and splitting the rest among a group of buyers that will hold less than 30% each.

“We see significant long-term potential in China and are evaluating the best ways to capture the future growth opportunities. We are looking for a strategic partner with like-minded values, who shares our vision to provide a premium coffeehouse experience. We remain committed to China and want to retain a meaningful stake in the business. Any deal must make sense for Starbucks business and partners,” said a spokesperson from Starbucks.

Starbucks’ new China coffee rival might be among the bidders for its business

This major business move by Starbucks comes at a very interesting time, since its biggest coffee chain rival, Luckin Coffee (LKNCY) , has just entered the U.S. market by opening its first two coffee shops in New York City this month.

Although Starbucks is the biggest coffeehouse chain worldwide, Luckin Coffee has already built over 24,000 stores in Asia in less than 10 years since its establishment, surpassing Starbucks and becoming China’s largest coffee chain in 2023.

And its growth remains strong.

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During its first quarter of fiscal 2025, Luckin Coffee opened 1,757 stores, comparable sales increased 8.1%, and revenues were up 41.2%.

Now, Luckin Coffee might be trying to become an insider in Starbucks’ business because Centurium Capital, a majority shareholder of the Chinese coffee chain, is reportedly among the contenders bidding for a stake.

Starbucks has yet to release an official public statement on the matter, and the bidding war may ultimately conclude without a deal if the offers fall short of the company’s expectations. As of now, only time will tell.