Starbucks China Business Attracts Bids Valuing it at $5 Billion

Starbucks' China business is attracting bids from interested parties, with valuations reaching as high as $5 billion. This is lower than early reports of a $10 billion sale. The company's China business is seen as a strategic asset, with a large customer base and significant growth potential. The sale is expected to be completed in the coming months.

Starbucks' China business has garnered significant interest from potential buyers, with valuations reaching as high as $5 billion. This valuation is lower than initial reports of a $10 billion sale, indicating a more conservative estimate of the business's worth. The sale is expected to be completed in the coming months, with the company maintaining a meaningful stake in the business.

Most bidders have valued Starbucks China at around 10 times its projected 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $400 million to $500 million [1]. This valuation is similar to that of Starbucks' main rival, Luckin Coffee, which is currently valued at nine times its projected EBITDA for the next 12 months [1].

The interest in Starbucks' China business is driven by its large customer base and significant growth potential. Despite facing stiff competition from local brands like Luckin Coffee, Starbucks has maintained a strong presence in the market. The company has taken steps to increase its market share, including reducing prices for some non-coffee drinks and introducing new, China-centric products [1].

The bidding process began in early September, with around 10 potential buyers invited to submit non-binding offers. The list of bidders includes private equity firms Carlyle, EQT, Hillhouse Investment, Primavera Capital, and Bain Capital, as well as technology major Tencent [1, 2]. It is not clear what the next steps in the sale process are, but typically, the seller would select a smaller group of bidders for a final round of binding offers.

Starbucks has not yet decided how large a stake it is selling in the China business. The company has stated that it is not considering a full sale of the business and plans to maintain a meaningful stake [1]. The company's enterprise value for the global business is 20.6 times its trailing 12-month EBITDA, and is projected to be 19.3 times the forecast of EBITDA for the next 12 months [1].

References:
[1] https://www.reuters.com/world/china/starbucks-china-valued-about-5-billion-by-bidders-sources-say-2025-09-05/
[2] https://seekingalpha.com/news/4492693-starbucks-attracts-bids-for-its-china-business-valuing-it-at-close-to-5-billion