Carlyle Group, EQT, HongShan Capital, Boyu Capital, and Primavera Capital have emerged as final bidders for a controlling stake in Starbucks’ China operations, according to sources cited by Reuters.

Binding offers are due in early October and a potential agreement expected by the end of the month, according to people familiar with the matter.

The Seattle-based coffee chain, which operates more than a fifth of its global stores in China, is seeking to bring in a new private equity backer to help revive growth in its most important international market. Early-stage offers last month valued the business at up to $5bn.

Starbucks has agreed to sell control of its China unit but will retain its coffee bean roasting facility for quality control purposes. While the stake size remains under negotiation, the company has said it intends to maintain a meaningful holding.

The deal comes as Starbucks faces mounting pressure from local rivals. Its market share has dropped to 14% in 2024 from 34% in 2019, Euromonitor data shows. The company has responded with price cuts on non-coffee drinks and faster launches of localised products, helping drive a 2% comparable-store sales increase in the latest quarter.

Primavera is expected to partner with a co-investor in its bid. Carlyle, EQT, and HongShan all declined to comment, while Goldman Sachs, advising Starbucks on the process, also declined.

The sale highlights private equity’s appetite for consumer-facing assets in China despite market headwinds, with global buyout firms betting on long-term demand growth in the world’s second-largest economy.

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