Apollo Global Management Inc., a US private equity firm, is in talks to buy a minority stake in Starbucks’ Middle East, North Africa, and central Asia franchise, dubbed “Project Emerald.” The privately owned retailer is looking to sell a 30% stake in the business. Saudi Arabia’s Public Investment Fund (PIF) has also been shortlisted to buy the stake. Starbucks operates around 2,000 outlets in 13 countries, including the Middle East, North Africa, Kazakhstan, and Azerbaijan. The company was valued at between $4 billion and $5 billion in 2022.
Starbucks has faced criticism for missing market expectations for first-quarter results due to the Israel-Hamas war, which has significantly impacted sales in the Middle East and the US. However, it remains committed to its growth ambitions in its international segment. Starbucks has dismissed rumours of providing support to the Israeli government or army in October.
A deal would widen the investor base of the privately-owned business held by the Alshaya family since 1999. Some of the Middle East’s largest private companies are increasingly seeking outside investors through listings or strategic stake sales. In 2022, AlShaya pulled out of Russia and shuttered 130 stores to comply with Starbucks’ withdrawal from the sanctioned country after its war with the Ukraine.
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