Starbucks Seeks Non-Binding Bids for China Unit Within Two Weeks

Starbucks has asked shortlisted bidders to submit non-binding offers for a stake in its China business within two weeks, according to Reuters. The company invited firms such as Carlyle, EQT, Hillhouse Investment, and TPG to make bids. The goal is to finalize a deal by the end of the year. The move is part of Starbucks' strategy to focus on its core business and simplify its operations.

Starbucks has invited shortlisted bidders to submit non-binding offers for a stake in its China business within the next two weeks, according to Reuters. The company has invited firms such as Carlyle, EQT, Hillhouse Investment, and TPG to make bids. The goal is to finalize a deal by the end of the year. This move is part of Starbucks' strategy to focus on its core business and simplify its operations.

The invitation follows months of discussions with potential buyers, including private equity firms and technology companies. Starbucks has not disclosed the exact structure of the sale or the size of the stake, but sources indicate that the China business could be valued at up to $10 billion. The company has held informal talks with a range of potential buyers since the second half of last year and aims to reach a deal by year-end.

The move to seek external investment reflects Starbucks' commitment to maintaining a strong presence in the competitive and fast-evolving Chinese market. The company has faced challenges in China, including sluggish economic growth and competition from local brands such as Luckin Coffee. However, recent steps such as price reductions and increased innovation have shown signs of improvement.

Starbucks' CEO Brian Niccol has stated that the company remains committed to its China business and wants to retain a meaningful stake. He emphasized that the company will only enter a transaction if it makes sense for Starbucks.

The decision to seek investment in its China business is part of Starbucks' broader strategy to enhance its global footprint. By partnering with local investors, Starbucks aims to leverage their market knowledge and resources to drive growth and innovation. This approach has proven successful in other markets, where strategic partnerships have helped the company navigate local challenges and capitalize on opportunities.

The urgency of the two-week deadline underscores the importance of the China market to Starbucks' global strategy. As the company continues to explore strategic partnerships and investments, it remains focused on delivering value to its shareholders and customers alike.

References:
[1] https://www.ainvest.com/news/starbucks-seeks-investors-china-expansion-week-deadline-2508/
[2] https://investorshub.advfn.com/market-news/article/15165/starbucks-invites-offers-for-china-unit-stake-sets-two-week-deadline-reuters
[3] https://www.investing.com/news/stock-market-news/starbucks-expects-nonbinding-bids-for-china-business-within-two-weeks-sources-say-4206031