The race to acquire a majority stake in Starbucks’ China business has narrowed to four finalists: Boyu Capital, Carlyle Group, EQT, and HongShan.
According to people familiar with the matter, the firms received confirmation letters from the seller earlier this month. Goldman Sachs, which is managing the process, is expected to select a buyer by the end of October. That decision would conclude a year-long contest that attracted more than a dozen suitors.
Bidders are valuing the business at about USD 5 billion, based on projected 2025 EBITDA of USD 400–500 million, implying a multiple of roughly ten times.
Since reports of a sale first surfaced in late 2024, Starbucks China has drawn interest from investors including KKR, Hillhouse Investment, and PAG. Speculation has centered on valuation and on which firm might prevail. At one point, the process even included a “reverse management roadshow.”
The shortlist
Carlyle’s inclusion was widely expected, given its track record with McDonald’s China.
In 2017, McDonald’s sold 80% of its China business for USD 2.08 billion, with Carlyle taking a 28% stake. The chain expanded quickly under the new structure, opening 1,000 outlets within a year. Carlyle exited in 2023, selling its stake back to McDonald’s for USD 1.8 billion and netting about USD 1.2 billion in gains, a 6.7-times return.
The firm has remained active globally, combining acquisitions with timely exits. In early 2025, it consolidated two Indian automotive parts makers, and in 2022, it acquired cosmetics packaging producer HCP Packaging. In China, it has invested in healthcare services provider Meinian Onehealth. With Starbucks, Carlyle could draw on its McDonald’s China playbook, balancing expansion with disciplined exits.
Boyu Capital, known for its discreet but influential role in major transactions, also made the cut. Early in its history, it backed Alibaba’s share repurchase from Yahoo and took part in Sunrise Duty Free’s acquisition.
More recently, Boyu has shifted toward larger buyouts. In May, its fifth US dollar fund acquired a 42–45% stake in Beijing SKP, valuing the luxury mall at USD 4–5 billion. It also bought a majority stake in medical device maker Quasar and a minority stake in pet food retailer Seek. With deeper reserves from new funds, Boyu has broadened its scope from high-profile strategic deals to recurring large-scale acquisitions.
Swedish buyout group EQT is less established in China but has maintained a regional presence. Chairman Jean Salata, who previously led an Asian investment program for Baring Private Equity Partners before merging it into EQT, oversees teams in Hong Kong, Beijing, and Shanghai.
EQT reported USD 15.1 billion in exits in the first half of 2025, relying heavily on M&A over IPOs. It privatized Nord Anglia Education through a consortium, effectively selling to itself and limited partners, and divested healthcare assets including Karo Healthcare. Industry observers note EQT’s emphasis on operational improvements rather than financial engineering. If it secures Starbucks China, it may adopt a more hands-on approach than its rivals.
HongShan, formerly Sequoia China, has accelerated its pace of acquisitions. Earlier this year, it agreed to buy UK-based Marshall Group for EUR 1.1 billion (USD 1.2 billion), gaining majority control. It also took control of South Korean fashion label We11done and launched a joint venture with Li-Ning.
Behind these moves is a buyout team led by Jia Qin, previously head of North Asia M&A at JPMorgan. Fundraising remains strong: HongShan closed RMB 18 billion (USD 2.5 billion) in new funds in July 2024, but deployment pressure is rising. For a firm better known for venture investing, the Starbucks bid reflects its shift toward large-scale buyouts.
Going on sale
For the past year, Starbucks China has been one of the market’s most closely followed M&A stories.
Bloomberg first reported in November 2024 that Starbucks was exploring options for its China business, including stake sales or partnerships. The company denied plans for a full exit but acknowledged interest in external funding, fueling speculation about structure and valuation.
The news triggered a rush of interest from private equity firms and Chinese investors, among them Carlyle, KKR, Bain Capital, Boyu, EQT, Hillhouse, Primavera Capital Group, and CDH Investments. Tencent and Alibaba were also rumored to have explored bids.
Valuations varied widely. Some bidders valued Starbucks China at USD 5 billion based on EBITDA, while others suggested figures as high as USD 10 billion, reflecting different views on growth potential amid rising competition from Luckin Coffee and Cotti Coffee.
In August, Starbucks requested nonbinding offers, signaling it was narrowing the pool to serious, well-capitalized buyers. At the same time, it emphasized that it would retain a stake and core assets, reducing the appeal for investors seeking full control.
Even once a final buyer is chosen, the story is unlikely to end. For Starbucks, the sale marks the beginning of a broader strategic realignment in China.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xu Muxin for 36Kr.