Deliberations are ongoing and may not result in an agreement, the people said, asking to not be identified because the information isn’t public.
Boyu didn’t immediately respond to requests for comment. Representatives of 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 Inc 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 it plans to expand that number to about 20,000. The headquarters of the business in the country are in Shanghai.
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Boyu is also in talks with banks for a loan of the equivalent of about US$1.4 billion ($1.8 billion) to support its acquisition of the China business, people familiar with the matter have said. The Chinese retail operations are valued at around US$4 billion.
The joint-venture agreement between Starbucks and Boyu is expected to be finalised in the second quarter next year.
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