Starbucks Rejects Caixin Report It May Sell China Operations

Chinese business publication Caixin reported on 23 June that Starbucks Corp. is weighing a full sale of its China operations and has held preliminary discussions with more than a dozen potential buyers, including private-equity firms Hillhouse Capital Group, FountainVest Partners and Trustar Capital. People familiar with the talks put indicative valuations for the business at about US$5 billion to US$6 billion.

The report lifted Starbucks shares in late U.S. trading. China is the Seattle-based company’s second-largest market, with 7,758 outlets as of March, yet the brand has been losing ground to lower-priced domestic chains such as Luckin and Cotti Coffee. Starbucks trimmed the price of dozens of drinks this month in an effort to defend market share.

On 24 June Starbucks said it is "not currently considering a full sale of its China operations," pushing back on the Caixin article. Nevertheless, sources told Reuters the coffee chain has explored strategic options—including a possible stake sale—under the guidance of Goldman Sachs. The company said it remains committed to expanding in China, which it still sees as a long-term growth engine.