Starbucks China Sale Enters Final Round | Mega M&A

"Far from the final act." By Muxin Xu

Edited by Zhiyan Chen

The list of bidders for Starbucks' China business has narrowed to four: Boyu Capital, Carlyle Group, EQT, and HongShan.

Sources say these four private equity firms received confirmation letters from the seller last week. The sale, led by Goldman Sachs, is expected to finalize a winning bidder by the end of October. If the deal closes, it will mark the end of a year-long process that drew more than a dozen institutions to one of the most closely watched auctions in recent memory.

Bidders have valued Starbucks China at roughly $5 billion. Based on projected 2025 EBITDA of $400–500 million, that implies a multiple of about 10x.

Since rumors of a sale first surfaced in late 2024, Starbucks' China operations have attracted top-tier global capital — KKR, Hillhouse Capital, PAG, among others — with endless speculation swirling around the ultimate buyer and price. At one point, the process even featured the unusual spectacle of a "reverse management roadshow."

So how did these four firms make it to the final round?

Part 01

The Finalists

Carlyle was the least surprising name on the shortlist, given its experience with McDonald's China.

In 2017, McDonald's sold 80% of its China business for $2.08 billion, with Carlyle taking a 28% stake. Backed by Carlyle and other investors, McDonald's China expanded rapidly — opening 1,000 stores in a single year — and delivered handsome returns to shareholders. In 2023, Carlyle sold its 28% stake back to McDonald's Global for $1.8 billion, netting roughly $1.2 billion in profit and achieving a 6.7x return on investment.

Carlyle has been active on the global M&A stage in recent years, playing both offense and defense. In early 2025, it completed the acquisition and consolidation of two Indian auto parts companies through its fund platform. In 2022, it fully acquired cosmetics packaging manufacturer HCP Packaging. In China, it took a roughly 13.5% stake in Meinian Onehealth. Geographically, Carlyle has broken free of its American roots, becoming increasingly active in India and China.

Yet Carlyle's strategy isn't purely expansionary — it knows when to exit. If selected, it would likely replicate the playbook it used with McDonald's China: engineer the buyout, then engineer the exit.

The enigmatic Boyu Capital has long been a central player in major buyout transactions. From its founding, it made its name through deals like the acquisition of Shanghai Sunrise Duty Free and its role in Alibaba's buyback of Yahoo's stake.

But Boyu's M&A approach has evolved in recent years.

In May 2025, Boyu's fifth USD fund, through an affiliate, agreed to indirectly acquire 42–45% of Beijing SKP at a valuation of $4–5 billion. It also acquired minority stakes in pet food manufacturer Shuaik Pet and a majority stake in medical device maker Quasar.

If its early high-profile, strategically significant deals with Alibaba and Sunrise were primarily about building brand and establishing footing — with relatively few large transactions — the picture has shifted as Boyu has raised multiple USD and RMB funds and grown in scale. The frequency of its blockbuster deals has increased. Two "$5 billion valuation club" transactions this year alone signal ample firepower and growing comfort in the buyout space.

Swedish PE giant EQT remains little-known in China, but its ties to Asia run deep. Chairman Jean Salata joined Baring Private Equity Asia in 1997, later led a management buyout of that firm, and built what became EQT Asia. EQT maintains investment professionals in Hong Kong, Beijing, and Shanghai.

Notably, EQT achieved $15.1 billion in exits in the first half of this year — accomplished primarily through M&A rather than traditional IPOs.

Specifically, EQT orchestrated the take-private of portfolio company Nord Anglia Education, with a consortium it led serving as the buyer. This "selling to your own LPs" structure bypassed sluggish public markets. EQT then completed additional M&A exits, successfully selling assets including consumer healthcare business Karo Healthcare.

Veteran buyout investor Xiao Wang has expressed admiration for EQT's approach. He identifies two distinguishing features: First, it combines growth investing with control investing rather than relying heavily on financial leverage. Second, EQT implements comprehensive operational improvements at controlled companies rather than offering limited, surface-level value-add.

This suggests that if EQT wins the bid, it would take a heavier hand in Starbucks China's future operations.

As for HongShan, it needs little introduction. What merits attention is the frequency of its buyout activity in recent years.

HongShan's most recent deal came earlier this year, when it reached a final agreement to acquire a majority stake in Marshall Group at an €1.1 billion valuation (roughly RMB 8.4 billion). Beyond Marshall, HongShan has acquired majority stakes in Korean fashion label WE11DONE and formed a joint venture with Li-Ning.

HongShan's buyout team has also come into view, including buyout team lead Qin Jia, formerly of JPMorgan's North Asia M&A group.

For HongShan in recent years, fundraising hasn't been the problem — deployment has. In July 2024, HongShan completed a RMB 18 billion raise. Sitting on a capital pool of that magnitude, even a firm built on venture-style investing has had to embrace buyouts. That imperative likely explains HongShan's active participation in this transaction.

Part 02

Starbucks' Year on the Market

Over the past year, as a marquee M&A case, Starbucks China has remained firmly in the spotlight.

Bloomberg broke the news first, reporting in November 2024 that Starbucks was evaluating strategic options for China, including partial stake sales or bringing in strategic investors. Facing market frenzy, Starbucks responded cautiously, emphasizing it was "not considering a full sale" and would retain a meaningful stake. The message was clear: the company needed external capital but intended to maintain brand control.

This deliberately ambiguous posture, rich with possibility, instantly animated capital markets. A wave of global PE giants and domestic players descended. The early list of potential investors ran to several dozen names, including international firms like Carlyle, KKR, and Bain Capital; European player EQT; and domestic firms like Boyu, Hillhouse Capital, Primavera, and CDH. Rumors even briefly surfaced that internet giants like Tencent and Alibaba were in talks.

The capital scramble played out in valuation terms as well.

External estimates of Starbucks China's value fluctuated constantly — $5 billion based on EBITDA calculations, with extreme reports reaching $10 billion. The divergence reflected market disagreement over its long-term growth curve, given that Starbucks' China market share has steadily eroded under pressure from domestic brands like Luckin and Cotti.

But Starbucks' subsequent moves made clear who held the stronger hand.

In August, Starbucks asked shortlisted bidders to submit non-binding indications of interest. A non-binding offer provides a preliminary price range based on due diligence without legal commitment — allowing for future adjustments as more information emerges. This move sent two signals: first, that the company wanted to quickly narrow the field to serious, well-capitalized buyers; second, that it was asserting a "seller-led" posture to preserve negotiating leverage.

Notably, Starbucks has consistently refused a full sale, instead retaining core assets and a meaningful equity stake.

This structure means buyers won't obtain full control over governance and strategy, potentially dampening some bids. After all, control premium is a key driver in competitive auctions, and Starbucks deliberately kept that chip off the table.

From a longer perspective, even if October does bring a winning bidder, this M&A drama will be far from its final act.

"Great Buyouts" is a column by An Yong focused on the M&A space, with particular interest in revisiting past deals — successes and failures alike — to distill lessons for today's participants. Image source: Unsplash

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