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Exclusive-Apollo in talks for AlShaya Starbucks franchise, sources say

2024.02.08 00:25


© Reuters. FILE PHOTO: A lady shows a crimson Starbucks cup at a Starbucks cafe in Beirut, Lebanon November 20, 2016. REUTERS/Jamal Saidi/File Photo

By Hadeel Al Sayegh, Andres Gonzalez and Pablo Mayo Cerqueiro

DUBAI/LONDON (Reuters) – U.S non-public fairness agency Apollo Global Management (NYSE:) Inc is in talks to purchase a minority stake in the Middle East, North Africa and central Asia Starbucks (NASDAQ:) franchise operated by Kuwait’s AlShaya Group, three sources near the matter mentioned.

Dubbed “Project Emerald”, in line with two of the individuals, the privately owned retailer is seeking to promote a minority stake of about 30% in the enterprise, Reuters reported beforehand.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), which has beforehand been shortlisted to purchase the stake, can be nonetheless concerned in the talks, one of many individuals and a 3rd one mentioned.

The Starbucks unit runs round 2,000 retailers in 13 nations, throughout the Middle East and North Africa, Kazakhstan and Azerbaijan. It was valued at between $4 billion and $5 billion in 2022, Reuters reported beforehand, earlier than it exited Russia.

Starbucks mentioned in January that the Israel-Hamas warfare has damage its enterprise in the area because it missed market expectations for first-quarter outcomes.

It mentioned gross sales had been considerably impacted because of the battle, in the Middle East and in the U.S., as some customers launched protests and boycott campaigns asking the corporate to take a stance on the difficulty. However it added it remained dedicated to its development ambitions in its worldwide section.

In the wake of the boycotts, Starbucks in October mentioned it was a non-political organisation and dismissed rumours that it had offered assist to the Israeli authorities or military.

A deal would widen the investor base of the privately-owned enterprise held by the Alshaya household since 1999. Some of the Middle East’s greatest non-public corporations have more and more been seeking to convey in outdoors buyers via listings or strategic stake gross sales.

In 2022, AlShaya pulled out of Russia and shuttered 130 shops to adjust to Starbucks’ choice to withdraw from the sanctioned nation after its warfare with the Ukraine.

Established in 1890, Alshaya is likely one of the greatest retail operators in the area with rights to function companies of standard Western manufacturers together with The Cheesecake Factory (NASDAQ:), Shake Shack (NYSE:) and Pottery Barn.

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