Riyadh: The Kingdom of Saudi Arabia’s Public Investment Fund (PIF), which is chaired by Crown Prince Mohammed bin Salman, is seeking to acquire a stake in the franchise of the Starbucks chain of cafes in the Middle East, affiliated with the Kuwaiti Alshaya group.
The PIF, which manages 620 billion dollars in assets, is leading an alliance to obtain a share within a few weeks.
As per media reports, private firms may invest in the company’s debt along with the PIF.
According to the American Bloomberg agency, quoting informed sources, Alshaya Group, which works with US bank JP Morgan, estimated the concession at 15 billion dollars, while potential buyers expect it to be valued at 11 billion dollars.
If the transaction is completed, Starbucks business will provide the Public Investment Fund with immediate access to approximately 1,700 outlets in 14 markets spanning some of the largest emerging economies, from Saudi Arabia to Turkey.
Alshaya company— oldest company
Established in 1890, Alshaya Group is the oldest company in Kuwait, and one of the largest operators of well-known retail brands in the Middle East; such as Victoria’s Secret and Chase Cake Factory.
The Starbucks coffee chain, headquartered in Seattle, is the largest franchise of the Kuwaiti group.
The group operates more than 4,000 stores across the region, from Dubai to Turkey and Russia, and includes nearly 70 brands.
The group employs more than 50,000 people, and its portfolio in the region includes other brands such as The Body Shop, H&M and PF Chang’s, according to its website.
Saudi sovereign fund investments
The Saudi Investment Fund, which ranks fifth in the world with assets of 620 billion dollars, has many investments in various industries as part of Vision 2030 to diversify the Saudi economy away from oil.
In May 2022, the fund launched the Saudi Coffee Company, and said that it would pump 300 million dollars over the next ten years to raise coffee production in the Kingdom from 300 tons annually to 2500 tons.
