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MILAN – Luckin Coffee is reportedly interested in making a bid for Blue Bottle Coffee, the iconic US coffee chain owned by Nestlé. According to confidential sources cited by Bloomberg, China’s biggest coffee chain and its backer Centurium Capital are also considering other possible acquisitions, including the operator of the Chinese stores of Kyoto-based chain % Arabica, which counts private equity firm PAG as an investor.
Luckin and Centurium had also considered acquiring Costa Coffee, but their interest in the British chain subsequently waned.
Deliberations are at an early stage and may not lead to a bid, the people quoted by Bloomberg said.
Representatives for Nestle, PAG and Coca-Cola declined to comment, while Centurium, Luckin and % Arabica didn’t immediately respond to requests seeking comment, Bloomberg also reported.
As of 30 September, Luckin Coffee had a total of 29,214 outlets, most of which were in China. The company also has a presence in Singapore, Malaysia, and the United States.
After being delisted from the Nasdaq for accounting fraud, Luckin Coffee’s fate seemed sealed.
However, the company’s financial recovery and support from its main investor, Centurium Capital, enabled it to make a sensational comeback, and Luckin Coffee has since returned to rapid growth, overtaking Starbucks in China two years ago.
This renewed success is underpinned by an agile and aggressive business model based on apps and takeaways, all at highly competitive prices.
This year, the Chinese chain made its debut in the United States, where it currently has five locations, all in New York.
Nestlé acquired a stake of just over two-thirds of Blue Bottle in 2017 for $425 million, compared to a total asset value estimated at the time at around $700 million.
The Swiss multinational reportedly turned to investment bank Morgan Stanley to evaluate a range of options for this asset, including the possible sale of the chain.
