Alshaya Group Explores Sale of Stake in Starbucks Franchise Business in the Middle East
**Alshaya Group** is reportedly in talks to sell a minority stake in its popular Starbucks franchise business in the Middle East. US investment firm **Apollo Global Management Inc** and **Saudi Arabia’s Public Investment Fund (PIF)** have emerged as potential interested parties looking to acquire a stake in the franchise.
Alshaya Group is looking to sell approximately **30%** of its business, providing an opportunity for investors to enter into the thriving Middle Eastern coffee market. This potential investment presents a new avenue for Apollo, an investment firm traditionally known for its focus on tech and retirement funds, and highlights the PIF’s increasing involvement in the coffee sector.
Saudi Arabia’s PIF was first linked to a minority stake purchase in June 2022, showing early interest in the region’s lucrative coffee industry. Alshaya Group has been the successful Starbucks franchise partner in the Middle East and North Africa for over two decades, currently operating around 2,000 stores across multiple countries including Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey, the UAE, Kazakhstan, and Azerbaijan.
In a bid to further expand its presence in the region, Alshaya Group CEO John Hadden announced ambitious plans in October 2023 to open **250 Starbucks stores annually** across the Middle East. The company aims to reach a remarkable total of **3,000 outlets by 2028**, capitalizing on the growing demand for premium coffee experiences.
With its establishment dating back to 1890, Alshaya Group is a major influential player in the Middle Eastern retail market, boasting diverse operations spanning the foodservice, fashion, pharmacy, and entertainment industries. Alongside Starbucks, the company holds licenses for other renowned brands including H&M, Boots, Le Pain Quotidien, Shake Shack, and Pizza Express.
Overall, as Alshaya Group explores the potential sale of a minority stake in its Starbucks franchise business, investors like Apollo Global Management Inc and Saudi Arabia’s Public Investment Fund undoubtedly recognize the tremendous growth opportunities in the Middle Eastern coffee market.
Analyst comment
Positive news. The potential sale of a minority stake in Alshaya Group’s Starbucks franchise business in the Middle East presents a new avenue for investors like Apollo and PIF to enter the thriving coffee market. This investment aligns with Alshaya’s ambitious plans to expand its presence and capitalize on the growing demand for premium coffee experiences. Expect increased market activity and growth in the Middle Eastern coffee sector.
