New progress! Starbucks selects buyers for its China business?!

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In the past year, Starbucks has been seeking local partners to revitalize business growth in China. Yesterday, Starbucks made new progress in selling its China business.

The British "Financial Times" reported that U.S. private equity giant Carlyle and China's Boyu Capital have become the main bidders for a majority stake in Starbucks's China business, and the two groups are currently regarded as Starbucks's preferred partners.

Three sources familiar with the transaction process revealed that the deal could value Starbucks 'China business close to US$4 billion (excluding franchise fees). If Starbucks' retained equity and continuous franchise revenue in the future are included, the total value could exceed US$10 billion.

The report also mentioned that five private equity investors submitted binding offers last week. In addition to Carlyle and Boyu, other potential bidders include well-known investment institutions such as Sequoia China (now renamed "Hongshan Capital"), Primavera and FountainVest Partners, and the bidders may eventually form a consortium.

It is worth mentioning that in early July, media reported that Starbucks might retain a 30% stake after selling its China business, but now this figure has changed, and Starbucks may eventually retain a 49% stake in its China business. In other words, Starbucks is likely to remain the largest shareholder in its China business even if other capital is introduced.

In addition, the outside world has different opinions on who may sell Starbucks 'China business. Industry analysts believe that Carlyle has rich investment experience in China and participated in the 2017 McDonald's China business divestiture case, so it may be able to take the lead with its experience. But judging from the fact that Starbucks is closely evaluating bidders 'ability to transform supply chains in the China market and maintain local partnerships, China private equity groups may rely on local advantages and be in a favorable position to compete.

Faced with this equity sale, Starbucks remained cautiously optimistic and responded,"We have received strong interest from multiple high-quality partners who are all confident in Starbucks's long-term growth potential in China. Five bidders have recently submitted bids and we are evaluating the offers of these bidders. They all saw the Starbucks brand, business momentum and the great value of our excellent team."

Its CEO Nicole publicly stated that the company's current focus is on finding partners consistent with its "mission and values.""This is related to how we ensure that the Starbucks brand is in a better position in the future, because I believe there will be thousands of Starbucks in China."

It has been almost a year since it was announced in November last year that Starbucks was considering selling its China business, and people from all walks of life at home and abroad are paying special attention to the progress of this matter. In a recent report from the Financial Times, people familiar with the matter revealed that although the specific time has not yet been determined, the sale of Starbucks 'China business may have entered the final stage, and Starbucks executives are expected to make a decision by the end of this month.

Picture from: Internet

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