Starbucks is exploring a stake sale in its China operations, with KKR & Co, Fountainvest Partners and PAG among the interested buyers.
Reuters reports that Chinese entities, including state-owned China Resources Holdings and Meituan, a food delivery platform, are also being considered as prospective buyers.
The move comes as the US-based coffee chain faces dwindling sales in China, its second-largest market globally.
Starbucks executive vice-president and chief financial officer Rachel Ruggeri is expected to visit China soon to engage in negotiations regarding the sale.
The size of the stake to be sold has not been finalised and will be a subject of the forthcoming talks, the sources said.
Starbucks is reported to be leaning towards a franchise model in partnership with a strategic investor as part of the stake sale strategy. This approach could see the valuation of Starbucks China exceed $1bn.
The company aims to finalise a deal for its China business by the end of 2025, although the exact structure of the potential transaction remains uncertain and open to changes.
In the Chinese market, Starbucks faces challenges such as slow economic growth and intense competition from local coffee chains such as Luckin Coffee, which has been capturing market share with its more affordable offerings and expansive reach in smaller cities.
In February 2025, Starbucks announced plans to axe 1,100 corporate and administrative employees as part of its restructure. It also seeks to streamline its menu, focusing on fewer and more popular items.
