Reuters: Saudi PIF still engaged in talks to buy a minority stake in Starbucks franchise

Sources revealed that the Public Investment Fund, which was previously shortlisted to buy a minority stake in Kuwait’s Alshaya Group’s Starbucks franchise, is still engaged in talks.

According to Reuters, three informed sources said that the American private equity firm Apollo Global Management is in talks to buy a minority stake in the Starbucks franchise in the Middle East, North Africa and Central Asia, which is operated by the Kuwaiti Alshaya Group.

Reuters previously reported from two sources that the company is looking to sell a minority stake of about 30% of this business.

The Starbucks unit operates about 2,000 outlets in 13 countries across the Middle East, North Africa, Kazakhstan and Azerbaijan. Reuters previously reported that its value ranged between four and five billion dollars in 2022, before exiting Russia.

Starbucks said in January that the war between Israel and Hamas had damaged its business in the region, and that its quarterly results fell short of market expectations.

It explained that sales were greatly affected by the conflict in the Middle East and the United States, as some consumers launched protests and boycott campaigns to demand that the company take a position on the issue.

Following the boycott, Starbucks confirmed in October that it was a non-political organization and denied rumors that it was providing support to the Israeli government or military.

The deal would expand the investor base in the business owned by the Alshaya family since 1999. Some of the largest private companies in the Middle East are increasingly looking to attract external investors through listing or strategic share sales.

In 2022, Alshaya withdrew from Russia and closed 130 stores in compliance with Starbucks’ decision to withdraw from the country after it was subject to sanctions over its war with Ukraine.

Founded in 1890, Alshaya Group is one of the largest retail companies in the region and owns the operating rights to well-known Western brands including the Cheesecake Factory, Shake Shack and Pottery Barn.