Boyu Capital is exploring the possibility of adding Tencent and GIC as limited partners in its planned acquisition of up to 60% of Starbucks’ China business, according to sources familiar with the matter cited by Bloomberg.

The deal values the Chinese unit at about $4bn.

The private equity firm intends to accelerate Starbucks’ expansion across smaller Chinese cities while increasing store openings in high-footfall areas such as airports, subways, and major tourist destinations. China is Starbucks’ second-largest market, and Boyu’s investment aims to strengthen the brand’s competitiveness against fast-growing local rivals.

The discussions are ongoing and may not lead to a final agreement. Representatives for Boyu, Starbucks, Tencent, and GIC declined to comment.

Starbucks is one of several global food and beverage groups leaning more heavily on domestic investment partners in China. Last week, Restaurant Brands International agreed to sell a controlling stake in Burger King China to CPE as Western brands seek stronger local alignment.

Starbucks operates about 8,000 stores in China, a market it entered in 1999, and plans to expand to roughly 20,000 locations. Boyu is also in discussions with banks for a loan equivalent to about $1.4bn to help finance the acquisition. A joint venture agreement between Starbucks and Boyu is expected to be finalised in the second quarter of next year.

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