Private equity firm Boyu Capital has reportedly emerged as the leading contender to acquire a controlling stake in Starbucks’ China business, according to a Bloomberg report citing people familiar with the matter.

The deal could value the coffee chain’s Chinese operations at more than $4 billion, following a competitive bidding process that included private equity groups such as Carlyle, EQT, FountainVest Partners, KKR, Hillhouse Investment and Primavera Capital.

Sources said that Boyu is currently in advanced discussions with Starbucks, though the negotiations could take several months to conclude and may not necessarily result in a final agreement. The report also noted that other investors, including Chinese internet companies, may participate as limited partners to help finance the transaction.

Founded in 2011 and headquartered in the Cayman Islands, Boyu Capital invests across private equity, public markets, real estate and infrastructure, with a focus on sectors such as technology, consumer goods, retail and healthcare.

Starbucks entered China in 1999 and has since expanded to around 7,800 stores across more than 250 cities. Chief executive Brian Niccol has previously said the company aims to grow that footprint to 20,000 stores, while maintaining a 'meaningful' stake in the business even after new investors come on board.

The Seattle-based coffee giant is seeking to strengthen its position in its second-largest market, where it faces mounting competition from local rivals such as Luckin Coffee.

A Starbucks' spokesperson told Refreshment: “We’ve had very strong interest from multiple, high-quality partners all of whom share our confidence in the long-term growth potential of Starbucks in China. Five bidders recently provided bids, and we are in the process of evaluating those. They all see significant value in the Starbucks brand, the business momentum and our talented team.”