Boyu Capital considers bringing Tencent, GIC into Starbucks China deal

[HONG KONG] Boyu Capital is considering bringing in Tencent Holdings, GIC and potentially others as limited partners in its acquisition of a stake in Starbucks' China business, sources familiar with the situation said. The private equity firm, which has agreed to buy as much as 60 per cent of the Chinese business, is looking to expand Starbucks in smaller cities to drive growth in its second-biggest market, the sources said. It also plans to open more branches at tourist attractions, subways and airports, where foot traffic is high, they said. Deliberations are ongoing and may not result in an agreement, the sources said, asking not to be identified because the information is not public. Boyu did not immediately respond to requests for comment. Representatives for Starbucks, GIC and Tencent declined to comment. Starbucks is among several foreign retailers turning to local partners to help improve their fortunes in China amid stern competition from domestic rivals. Restaurant Brands International last week reached a deal to sell a controlling stake in Burger King's operations in China to asset manager CPE. Starbucks has about 8,000 stores in China, a market it first entered in 1999, and it has said that it plans to expand that number to about 20,000. The headquarters of the business in the country are in Shanghai. BLOOMBERG