A prominent American investment company, Apollo Global Management Inc., together with the Saudi Arabian sovereign wealth fund, Public Investment Fund (PIF), have shown keen interest in acquiring part of the extensive coffee shop network presently franchised by a leading Kuwaiti firm.
Engaged in advanced discussions, the Alshaya Group is contemplating the divestiture of a minority interest in its lucrative Middle Eastern Starbucks operations. Sources suggest the group is aiming to offload close to 30% of its stake in this venture.
Apollo’s venture into the coffee domain marks a strategic shift, as the New York-based firm has traditionally concentrated on technology and retirement fund investments. In contrast, the PIF of Saudi Arabia has been actively amplifying its coffee-related investments, evidenced by its substantial infusion of capital into the Saudi Coffee Company, which has recently inked supply agreements with regional coffee chains.
Initial reports of PIF’s engagement in purchasing a minority stake surfaced in mid-2022, with subsequent updates indicating that negotiations were progressing towards a potential deal.
The partnership between Alshaya Group and Starbucks dates back to 1999, and since then, the group has successfully established approximately 2,000 stores across various countries in the Middle East and North Africa (MENA) region, including Turkey and the UAE, as well as extending its reach to Kazakhstan and Azerbaijan.
Recently, Alshaya Group’s CEO announced ambitious plans to inaugurate 250 new Starbucks stores each year within the Middle East, with a target of 3,000 outlets by 2028.
Founded over a century ago, Alshaya Group has grown into one of the MENA region’s preeminent retail conglomerates, with a diverse portfolio spanning the foodservice, fashion, health, and entertainment sectors. Among its array of esteemed international brands, it boasts names like H&M, Boots, and Pizza Express.