Centurium Capital, the Chinese private equity firm behind Luckin Coffee, is exploring a potential bid for Costa Coffee, the UK cafe chain currently being sold by Coca-Cola, according to people familiar with the matter cited by Bloomberg.

The discussions are at an early stage, and no final decision has been made. Centurium may choose to make an offer independently or through Luckin Coffee, in which it is a major shareholder.

The potential sale has drawn interest from several buyout firms and strategic investors, with indicative offers valuing Costa Coffee at around £1bn ($1.3bn).

A deal would mark Centurium’s first major European investment and expand its exposure to the global coffee market following Luckin’s rapid growth in China, where the brand now rivals Starbucks.

Founded by former Warburg Pincus executive David Li, Centurium manages more than $10bn in assets and has been an active investor in Chinese consumer and technology companies. The firm played a key role in restructuring Luckin Coffee after its 2020 accounting scandal and has since overseen its turnaround and relisting.

Coca-Cola acquired Costa Coffee in 2019 for £3.9bn as part of a broader push into beverages beyond soft drinks. However, the company has recently been divesting non-core assets to streamline its portfolio.

Representatives for Centurium, Luckin Coffee, Coca-Cola, and Costa Coffee did not comment on the potential deal.

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