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Rumors are circulating that Luckin Coffee is exploring outbound acquisitions, including foreign brands such as Costa Coffee.
The talks, if confirmed, would mark a push beyond China as the company responds to a softer domestic coffee market.
Any potential deal could reshape competition between Chinese and Western coffee chains in key international markets.
Luckin Coffee (OTCPK:LKNC.Y), recently trading at around $36.71, has drawn attention with reports that it may be eyeing overseas brands like Costa Coffee. The company has delivered very large returns over 5 years, along with a 24.4% return over the past year and 26.6% over 3 years, which helps explain why investors are closely watching its next move.
If outbound acquisitions materialize, they could signal a new phase in which Chinese coffee chains become more visible on global high streets. For investors, the focus will likely be on how any deal is structured, how it is funded, and whether overseas operations can sit comfortably alongside Luckin’s existing China focused network.
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OTCPK:LKNC.Y 1-Year Stock Price Chart
OTCPK:LKNC.Y 1-Year Stock Price Chart
Why Luckin Coffee could be great value
For investors, talk of Luckin Coffee looking at overseas brands like Costa Coffee points to a potential shift from a China-focused growth story to one that includes cross-border execution risk. Any outbound deal would likely be read as management trying to diversify away from a softer home market while also entering direct competition with global chains such as Starbucks and Tim Hortons on their own turf.
How This Fits Into The Luckin Coffee Narrative
The existing Luckin Coffee narrative already highlights rapid store expansion, heavy digital engagement and ongoing supply-chain investment inside China. A move to acquire a foreign brand would sit on top of that story rather than replace it, and investors would probably ask whether management can keep store productivity, cost controls and product development on track at home while integrating a large, potentially very different overseas business.
Risks and Rewards Investors Are Weighing
⚠️ Integration and governance risk if Luckin takes on a sizeable foreign asset while still managing fast store growth and past reputation issues.
⚠️ Capital-allocation risk if an overseas acquisition soaks up cash that could otherwise support store-level returns or balance-sheet strength in China.
🎁 A successful deal could broaden Luckin’s revenue base beyond a softer Chinese consumer market and reduce reliance on local demand cycles.
🎁 Greater brand visibility outside China could strengthen Luckin’s positioning versus Starbucks, Tim Hortons and regional rivals over time.