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Western food and beverage giants are increasingly turning to Chinese private equity firms as local competition intensifies and traditional operating models lose effectiveness. Brands such as Starbucks and Burger King are opting to sell majority stakes in their China businesses, allowing local partners to take control of operations while global owners retain brand and royalty economics.
Starbucks has agreed to sell a 60% stake in its China unit to Boyu Capital in a deal valuing the business at $4 billion, while CPE Capital is investing $350 million for an 83% stake in Burger King China. Both transactions are pending regulatory approval and expected to close next year. Other multinationals are following suit, with IDG Capital recently acquiring control of Yoplait’s China business and reports suggesting General Mills and Oatly are exploring divestments.
The shift reflects how quickly China’s consumer landscape has changed. Local private equity firms are known for operating at “China speed,” rapidly localizing menus, adjusting pricing, expanding into lower-tier cities and responding to digital-first consumer behavior. Domestic brands such as Luckin Coffee have overtaken foreign rivals, while global chains have struggled with declining store productivity and intensifying price competition.
Beyond capital, Chinese PE firms bring deep operational expertise, strong local networks and a willingness to overhaul management and strategy. Many partnerships are structured so that foreign companies retain minority stakes and intellectual property rights, generating long-term royalty income while handing day-to-day execution to local investors.
These subsidiaries have become attractive targets for private equity firms seeking stable, cash-generating assets amid slower dealmaking. Strong brand equity, predictable cash flows and clear exit paths—either through resale or IPO—make them appealing investments. The resurgence of carve-out transactions this year underscores the trend, as multinationals reassess their China exposure amid geopolitical uncertainty, slower consumer demand and shareholder pressure to refocus on core markets.
Source: CNBC
