[Alpha Biz= Kim Jisun] China’s Luckin Coffee has acquired Blue Bottle Coffee, the specialty coffee brand widely regarded as a pioneer of the third-wave coffee movement.

According to Chinese media outlets Jiemian and Wandian on March 4, Centurium Capital—an investor and operator behind Luckin Coffee—has signed an agreement with Nestlé to acquire Blue Bottle Coffee’s global store operations. The deal value is reported to be under $400 million.

Reports said Luckin Coffee secured the operational rights through a bidding process and signed the transaction with Nestlé, the majority shareholder of Blue Bottle Coffee.

Nestlé, which acquired a 68 percent stake in Blue Bottle Coffee in 2017 for $425 million, plans to retain Blue Bottle’s coffee machine and capsule businesses while selling the retail store operations.

Chinese media described the acquisition as symbolically significant for the global coffee market, noting that it brings together a globally recognized specialty coffee brand and a rapidly expanding Chinese coffee chain known for its strong supply chain capabilities and scale.

The report also said the deal marks a major turning point for Blue Bottle Coffee’s future in China and globally. Blue Bottle entered mainland China in 2022, but its expansion pace has been relatively slow.

According to Bloomberg, Centurium Capital has also been reviewing potential acquisitions of other coffee brands, including Coca-Cola’s Costa Coffee and Japan’s % Arabica.

Founded in 2017, Luckin Coffee was delisted from the Nasdaq in 2020 following an accounting fraud scandal. However, the company has since rapidly expanded its store network in mainland China and surpassed Starbucks in 2023 to become the country’s largest coffee chain.

Luckin Coffee reported revenue of 12.8 billion yuan (about $1.8 billion) in the fourth quarter of last year, up 33 percent from a year earlier. The company’s store count rose 39 percent year-on-year to 31,048 locations, including 30,888 in China and 160 overseas.

 

 

 

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