Saudi Arabia's Public Investment Fund is reportedly being considered as a potential investor for the Starbucks franchise in the Middle East, North Africa and central Asia
Saudi Arabia's PIF could purchase up to 30% of Kuwait-based Alshaya Group minority share in Starbucks | Photo credit: Starbucks
Saudi Arabia's Public Investment Fund (PIF) has reportedly been shortlisted to buy a stake in the Middle East, North Africa and central Asia Starbucks franchise, currently operated by Alshaya Group.
According to Reuters report, the sovereign wealth fund, which owns assets worth $600bn, could purchase up to 30% of Kuwait-based Alshaya Group minority share in Starbucks. The report cites sources suggesting the PIF is among several bids being considered.
Alshaya, the region's leading brand franchise owner, hired investment banking firm JP Morgan last year to sell a significant minority stake in the business, which could generate up to $5bn.
The Starbucks franchise in the region has several hundred outlets in 14 countries across the Middle East, Russia, and central Asia, including approximately 1,000 stores in the MENA region and 300 in Saudi Arabia.
The reported investment is the latest indication of efforts to strengthen Saudi coffee production and bolster heritage recognition. In May, Saudi Arabia’s PIF launched the Saudi Coffee Company, a government-backed organisation tasked with growing the Kingdom’s coffee production.
Data cited at the time indicated that coffee consumption in Saudi Arabia grew by approximately 4% a year between 2016 and 2021 and is forecast to increase by a further 5% annually to 2026, reaching an expected annual consumption of 28,700 tons.
Saudi Arabia’s Ministry of Culture has designated 2022 as 'The Year of Saudi Coffee'.