Saudi Arabia’s Public Investment Fund is in the lead in the acquisition of a minority stake in Kuwaiti conglomerate Alshaya Group’s Starbucks Corp. franchise, according to Bloomberg.

A private source told Bloomberg that the $620 billion Public Investment Fund has encouraged a number of investors to vie for a stake in the business and could reach a deal in the coming weeks. The private equity firms may invest in the company’s debt alongside the PIF.

According to a Bloomberg News report, Alshaya, which is working with JPMorgan Chase & Co, has valued the company at $15 billion, but potential buyers are counting on bids that bring the company’s value closer to $11 billion. Without a final decision, negotiations could either drag on longer or be abandoned. Representatives of PIF and Alshaya have both declined to comment.

Alshaya is one of the Middle East’s biggest operators of world-renowned retail brands such as Victoria’s Secret and the Cheesecake Factory. It was founded in 1890 and is considered Kuwait’s oldest company. The group operates over 4,000 shops across the region, from Dubai’s shopping malls to Turkey and Russia, and represents nearly 70 brands in total. According to its website, the company employs more than 50,000 people and has a regional portfolio that includes H&M, P.F. Chang’s and The Body Shop. Alshaya’s largest franchise is the Seattle-based coffee chain Starbucks.

The Starbucks operations would provide the PIF with immediate access to around 1,700 stores in 14 nations, encompassing some of the world’s largest growing economies, ranging from Saudi Arabia to Turkey. The kingdom is currently Starbucks’ largest market in the Middle East and North Africa region (MENA), with around 300 stores.

The PIF is investing in various industries to diversify sources of income away from oil. In May, the fund established the Saudi Coffee Co. to promote the kingdom’s coffee beans. PIF stated that it would invest more than $300 million over the next 10 years to increase the kingdom’s annual coffee production from 300 tonnes to 2,500 tonnes. 

In July of the same year, efforts to market the kingdom’s coffee beans started through a partnership with the Culinary Arts Commission, wherein terms of the agreement included plans to work across multiple platforms and get involved in content creation, sponsorship, marketing and merchandising opportunities.

Saudi Arabia’s Ministry of Culture officially declared 2022 as “The Year of Saudi Coffee” and has a dedicated website for the initiative that was launched this year on 4 January.

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