Luckin and Centurium had been considering Coca-Cola Co’s Costa Coffee as well, though they aren’t likely to proceed on that, the people said.
Deliberations are at an early stage and may not lead to a bid, the people said. Representatives for Nestle, PAG and Coca-Cola declined to comment, while Centurium, Luckin and % Arabica didn’t immediately respond to requests seeking comment.
Founded in 2017, Luckin has expanded with thousands of stores offering low-cost coffee and other customised drinks such as coconut or cheese latte. The growth has been rapid, enabling it to sweep past Starbucks Corp in store numbers in China, where the US coffee chain has decided to sell a majority stake in its local business to Boyu Capital.
Luckin’s fortunes have improved since it was delisted from the Nasdaq in 2020 due to an accounting scandal. Net revenue was US$2.1 billion in the quarter through September, a 50% increase from a year earlier, and net income was about US$180 million. It opened a net 3,008 new stores in the quarter, including five in Singapore, 21 in Malaysia and three in the US, taking its total worldwide to 29,214.
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Nestle has been working with Morgan Stanley to review options for Blue Bottle, Reuters reported this month. Blue Bottle was founded in California in 2002, and Nestle invested in the company 15 years later, paying about US$425 million for a 68% stake, Bloomberg News reported at the time. In addition to the US, Blue Bottle has outlets in China, Hong Kong, Japan, Singapore and South Korea.
% Arabica was founded in 2013 and has stores in Asia and the Middle East, as well as some in Europe and the Americas. The bulk of them are in mainland China, where it has more than 80 outlets, the company’s website shows.
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