From Starbucks to Burger King, “foreign brands” set off a “wave of sales” in China

The Zhitong Finance App learned that as local competition intensifies and traditional operating models gradually fail, Western food and beverage giants are increasingly turning to Chinese private equity firms to seek investment. Brands such as Starbucks (SBUX.US) and Burger King (QSR.US) chose to sell a majority stake in their Chinese business to allow local partners to control operations, while international brand owners retained the financial benefits of the brand and franchise.

Starbucks has agreed to sell 60% of its Chinese business to Boyu Capital. The deal valued the business at US$4 billion; at the same time, CPE Yuanfeng is investing US$350 million to acquire 83% of Burger King China's shares. Both deals are subject to regulatory approval and are expected to close next year. Other multinational companies have followed suit. IDG Capital recently acquired Yunuo Yogurt's Chinese business, and there are reports that General Mills (GIS.US) and Oatly (OTLY.US) are also considering selling some of their businesses.

This shift reflects the rapid changes in China's consumer landscape. Local private equity firms are known for their “Chinese speed” and can quickly localize menus, adjust prices, expand markets in low-tier cities, and respond positively to digital-first consumer behavior. Local brands such as Lucky Coffee have surpassed foreign competitors, while global coffee chains are facing the double dilemma of declining store efficiency and increased price competition.

In addition to capital, Chinese private equity firms also have deep operating experience, strong local networks, and the will to reform management and strategy. Many cooperation models allow foreign companies to retain minority shares and intellectual property rights to obtain long-term royalty income while handing over day-to-day operations to local investors.

Against the backdrop of a slowdown in trading activity, these subsidiaries have become ideal targets for private equity firms seeking stable, cash-flow assets. Strong brand value, predictable cash flow, and a clear exit path, whether through resale or IPO, make them highly attractive investment targets. This year's resurgence in spin-off deals highlights this trend, as multinational companies are re-evaluating their operations in China amid geopolitical uncertainty, slowing consumer demand, and shareholder pressure to refocus on core markets.