On Wednesday, CNBC reported that Starbucks China had attracted multiple bids for a potential sale of its stake, with a valuation reaching US$10 billion – roughly 9% of the parent company’s market capitalization.
Among the potential suitors – Hillhouse, Carlyle, and KKR – one name stood out: Centurium Capital.
Centurium is the controlling shareholder of Luckin Coffee, holding 31.3% of shares and 53.6% of voting rights, according to Luckin’s 2024 annual report. Notably, Centurium Chairman David Li recently took on the role of Chairman of Luckin Coffee itself.
This raises a curious question:
Why would the owner of Luckin want to buy Starbucks China – its main rival? After all, one of Luckin’s core ambitions is to outperform Starbucks in China—and by many measures, it’s already doing so.
A defensive strategy
While it remains unclear how serious Centurium’s bid is, the strategy – if true – makes sense. It would be a defensive acquisition.
If Starbucks China were acquired by another major Chinese capital group or competitor, it could evolve into a much more formidable threat to Luckin. Under new ownership (assuming flexibility within the brand licensing agreement), Starbucks China could:
- Lower its prices
- Launch small-format stores
- Revamp its digital customer experience
Given the strength and legacy of the Starbucks brand, such moves could help it regain significant market share from Luckin.
Controlling two price segments
On the other hand, if Centurium were to acquire Starbucks China, it could create a powerful multi-brand strategy, dominating different market segments:
- Luckin could remain the mass-market, tech-driven, value-focused brand.
- Starbucks could serve the premium and lifestyle-focused segment.
In that case, the new pressure wouldn’t be on Luckin—it would be on Mixue, the ultra-value player aggressively entering China’s coffee and beverage space.
The post Why would Luckin Coffee’s owner want to buy Starbucks China? first appeared on The Low Down - Momentum Works.
