Chinese coffee major Luckin Coffee is set to deepen its global push with the acquisition of US-based premium cafe chain Blue Bottle Coffee, Bloomberg News reported on Wednesday, as Beijing and Washington remain locked in a protracted trade war
Chinese coffee major Luckin Coffee is set to deepen its global push with the acquisition of US-based premium cafe chain Blue Bottle Coffee, Bloomberg News reported on Wednesday, as Beijing and Washington remain locked in a protracted trade war.
Centurium Capital Management, the controlling shareholder of Luckin, has agreed to buy Blue Bottle from Swiss food giant Nestle for around $400 million, Nikkei Asia said in a report on Thursday. While the deal could be finalised soon, there is no guarantee until agreements are formally signed, the report said.
There are no plans to merge the two brands, Nikkei Asia said in the report, adding that Luckin and Blue Bottle will operate independently.
Strategic pivot beyond discount coffee
The acquisition underscores Luckin’s ambition to move beyond its aggressive low-cost, app-driven model and build a foothold in the premium segment, both at home and overseas.
Founded in 2002, Blue Bottle operates more than 100 cafes across the US and Asia, along with an e-commerce platform. It entered China in 2020 with its first outlet in Shanghai, positioning itself as a higher-priced alternative to Starbucks. Nestle bought a 68 per cent stake in Blue Bottle in 2017 for about $425 million.
Blue Bottle has fewer than 20 stores in China and remains loss-making, even as it maintains a strong brand among urban, affluent consumers.
Luckin has grown at breakneck speed since its founding nine years ago. Its American depositary receipts, now trading on the OTC market, have risen about 16 per cent over the past year, giving the company a market value of roughly $9.5 billion. Shares closed 3 per cent higher at $34.67 on Wednesday following reports of the Blue Bottle deal.
Scale at home, ambitions abroad
Luckin recently opened its 30,000th store in China and, as of end-2025, operated 31,048 outlets globally — 20,234 self-operated and 10,814 partnership stores — marking a 39 per cent increase in shop count from a year earlier.
For the fiscal year ended December 2025, the company reported total revenue of 49.3 billion yuan ($6.8 billion), up 43 per cent year-on-year. Average monthly transacting customers rose 31 per cent to 94.2 million.
Known for its high-volume, low-margin model driven by mobile ordering and heavy discounting, Luckin has also signalled a strategic shift toward more premium offerings. Last month, it opened its first flagship store in Shenzhen aimed at elevating brand perception and diversifying its product mix.
The US market has been another testing ground. In cities such as New York, Luckin has sought to lure customers with beverages priced significantly below rivals, a strategy that echoes its domestic playbook.
Industry price wars and consolidation
China’s coffee and milk tea market has been gripped by intense price wars in recent years. Rival Cotti Coffee at one stage offered drinks for less than 10 yuan to capture market share, squeezing margins across the sector. Regulatory scrutiny and mounting losses have since cooled some of the price aggression.
The competitive pressures have also driven dealmaking. In November, Starbucks sold a majority stake in its China business to private equity firm Boyu Capital, reflecting the challenging operating environment for foreign brands.
Centurium and Luckin have previously evaluated other international coffee chains as potential acquisition targets, including Costa Coffee and the operator of % Arabica stores in China, according to the Bloomberg News report.
A deal shaped by geopolitics?
The timing of the Blue Bottle acquisition is notable. With trade tensions between China and the United States persisting, Chinese consumer brands acquiring American assets carry both symbolic and strategic weight.
For Luckin, the deal provides instant access to a globally recognised premium brand at a time when it seeks to diversify revenue streams and potentially relist in the US. For Nestle, the sale marks an exit from a niche specialty chain as it refocuses capital allocation priorities.
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