China’s Luckin Coffee set to buy Blue Bottle from Nestle for $400 million amid US trade tensions: Report

Chinese language espresso main Luckin Espresso is ready to deepen its international push with the acquisition of US-based premium cafe chain Blue Bottle Espresso, Bloomberg News reported on Wednesday, as Beijing and Washington stay locked in a protracted commerce conflict.

Centurium Capital Administration, the controlling shareholder of Luckin, has agreed to purchase Blue Bottle from Swiss meals big Nestle for round $400 million, Nikkei Asia stated in a report on Thursday. Whereas the deal could possibly be finalised quickly, there isn’t a assure till agreements are formally signed, the report stated.

There aren’t any plans to merge the 2 manufacturers, Nikkei Asia stated within the report, including that Luckin and Blue Bottle will function independently.

Strategic pivot past low cost espresso

The acquisition underscores Luckin’s ambition to maneuver past its aggressive low-cost, app-driven mannequin and construct a foothold within the premium phase, each at house and abroad.

Based in 2002, Blue Bottle operates greater than 100 cafes throughout the US and Asia, together with an e-commerce platform. It entered China in 2020 with its first outlet in Shanghai, positioning itself as a higher-priced various to Starbucks. Nestle purchased a 68 per cent stake in Blue Bottle in 2017 for about $425 million.

Blue Bottle has fewer than 20 shops in China and stays loss-making, even because it maintains a powerful model amongst city, prosperous customers.

Luckin has grown at breakneck pace since its founding 9 years in the past. Its American depositary receipts, now buying and selling on the OTC market, have risen about 16 per cent over the previous 12 months, giving the corporate a market worth of roughly $9.5 billion. Shares closed 3 per cent increased at $34.67 on Wednesday following stories of the Blue Bottle deal.

Scale at house, ambitions overseas

Luckin not too long ago opened its 30,000th retailer in China and, as of end-2025, operated 31,048 shops globally — 20,234 self-operated and 10,814 partnership shops — marking a 39 per cent improve in store rely from a 12 months earlier.

For the fiscal 12 months ended December 2025, the corporate reported whole income of 49.3 billion yuan ($6.8 billion), up 43 per cent year-on-year. Common month-to-month transacting clients rose 31 per cent to 94.2 million.

Recognized for its high-volume, low-margin mannequin pushed by cell ordering and heavy discounting, Luckin has additionally signalled a strategic shift towards extra premium choices. Final month, it opened its first flagship retailer in Shenzhen aimed toward elevating model notion and diversifying its product combine.

The US market has been one other testing floor. In cities corresponding to New York, Luckin has sought to lure clients with drinks priced considerably under rivals, a method that echoes its home playbook.

Trade value wars and consolidation

China’s espresso and milk tea market has been gripped by intense value wars lately. Rival Cotti Espresso at one stage provided drinks for lower than 10 yuan to seize market share, squeezing margins throughout the sector. Regulatory scrutiny and mounting losses have since cooled a number of the value aggression.

The aggressive pressures have additionally pushed dealmaking. In November, Starbucks bought a majority stake in its China enterprise to non-public fairness agency Boyu Capital, reflecting the difficult working atmosphere for international manufacturers.

Centurium and Luckin have beforehand evaluated different worldwide espresso chains as potential acquisition targets, together with Costa Espresso and the operator of % Arabica shops in China, in response to the Bloomberg News report.

A deal formed by geopolitics?

The timing of the Blue Bottle acquisition is notable. With commerce tensions between China and the US persisting, Chinese language client manufacturers buying American property carry each symbolic and strategic weight.

For Luckin, the deal gives on the spot entry to a globally recognised premium model at a time when it seeks to diversify income streams and doubtlessly relist within the US. For Nestle, the sale marks an exit from a distinct segment specialty chain because it refocuses capital allocation priorities.