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Saudi PIF Close to Buying Stake in Starbucks Middle East

Saudi PIF Close to Buying Stake in Starbucks Middle East

Tuesday, 7 June, 2022 - 07:15
Starbucks coffee shops are popular in the Gulf region and the Middle East. (Asharq Al-Awsat)

The Saudi Public Investment Fund (PIF) has been shortlisted to buy a stake in the Middle East, North Africa, and central Asia Starbucks franchise held by Alshaya Group, revealed sources.

The Starbucks franchise has several hundred outlets in 14 countries across the Middle East, Russia, and central Asia.

Last year, Kuwait-based Alshaya Group, the region's leading brand franchise owner, hired JPMorgan to sell a significant minority stake in the business.

The sources said it could sell up to 30 percent, generating $4 billion-$5 billion.

The PIF, which manages over $600 billion of assets, Alshaya, and JPMorgan declined to comment to Reuters.

The PIF is among the bidders that have made it to the next round as the sale process nears its final stages, the source said.

Several private equity bidders were also in the race, including CVC Capital Partners and Brookfield, but it was not immediately clear if they had been shortlisted.

The two sources said that Abu Dhabi state fund Mubadala Investment Co and Abu Dhabi state holding fund ADQ are no longer in the race.

Mubadala declined to comment, while ADQ did not immediately respond to a request for comment.

One source said funds raised could be used towards other businesses Alshaya owns and that the company's valuation is attractive, making the sale of a stake compelling.

The privately held Alshaya Group says it is the oldest company in Kuwait, first registered in 1890. It runs franchises including H&M, Mothercare, Debenhams, American Eagle Outfitters, and Victoria's Secret.

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