KKR, Fountainvest Partners and PAG are exploring a potential acquisition of a stake in Starbucks China, according to anonymous sources cited by Reuters. 

The move comes as the U.S.-based coffee chain seeks to rejuvenate sales in its second-largest market.

Chinese companies, including state-owned China Resources Holdings and food delivery giant Meituan, have also been approached as potential buyers. Starbucks’ executive vice president and CFO, Rachel Ruggeri, is scheduled to join senior company executives on a visit to China in the coming weeks to engage in sale talks.

This strategic review occurs at a challenging time for Starbucks. CEO Brian Niccol, who took the helm in August, faces the dual pressures of falling demand in both the U.S. and China, alongside a declining share price. In response, Starbucks recently announced plans to eliminate 1,100 corporate roles under its “Back to Starbucks” plan, aiming to streamline operations and improve customer experience at its U.S. stores.

The exact size of the stake to be sold remains undisclosed and will be determined through negotiations. In a likely franchisee deal, the Starbucks China business could be valued at more than $1bn.

A Starbucks spokesperson did not confirm the details, instead referring Reuters to Niccol’s earlier remarks during his earnings call following his market visit to China. This potential stake sale highlights Starbucks’ ongoing efforts to secure strategic partnerships and boost performance in a key market.