Starbucks is evaluating a potential strategic overhaul of its China business and has initiated discussions with private equity firms and other investors, according to a Bloomberg report citing sources close to the matter.

The move could result in the sale of a minority stake in its China operations or the formation of a regional joint venture.

The company has hired a financial adviser to distribute preliminary materials to interested parties. Starbucks is inviting feedback on ways to accelerate growth in its China unit, which is its second-largest global market with over 7,750 stores and quarterly revenues of $740m as of March. While no transaction is guaranteed, the business could be valued at several billion dollars, according to insiders.

The potential deal would align Starbucks with a growing trend among Western consumer brands using private equity partnerships in China to fuel expansion, improve local market penetration, and navigate regulatory and economic uncertainty. McDonald’s and Yum! Brands previously monetised their China units via stakes sold to Carlyle and Primavera Capital, respectively—strategies that also enhanced localisation and accelerated new store openings.

Starbucks is said to be considering a range of options, including bringing on a minority private equity partner, forming a strategic joint venture, or creating a region-specific platform focused on growth. The initiative comes as the company faces mounting competition from local players like Luckin Coffee and Cotti Coffee, which continue to scale rapidly across the Chinese market.

Source: Bloomberg

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