Starbucks Seeks Offers for China Business Amid Slowing Growth

Starbucks Corporation (SBUX.US) has reportedly asked a group of shortlisted potential bidders to submit non-binding offers for its China business within the next two weeks. The company has invited several private equity firms, including Carlyle, Sequoia, Hillhouse, and CDH Investments, to participate in management meetings where detailed financial and operational information about its China business was presented. Other potential bidders include Tencent, KKR, and Bain Capital.

Starbucks initiated the formal sale process for its China business in May, requesting potential buyers to submit responses to a questionnaire. At that time, the company stated that it did not intend to conduct a full-scale sale. According to sources, Starbucks shortlisted up to 10 bidders in July, who were then allowed access to financial and operational data after signing confidentiality agreements.

The potential sale of Starbucks' China business is estimated to value the business at around $100 billion. This move aims to revitalize the business, which has been impacted by slowing growth and intensified competition. The company has been in informal negotiations with potential buyers since the end of last year and plans to finalize a deal by the end of this year. In a recent earnings call, CEO Brian Niccol mentioned that Starbucks has attracted interest from over 20 potential buyers and is currently evaluating various options. Niccol emphasized that Starbucks remains committed to its China business and intends to retain a significant portion of the shares, stating that any transaction would only proceed if it is beneficial to Starbucks.