AlShaya’s Talks on Starbucks Franchise Stake Sale Halted, Sources Indicate – Reuters

By Hadeel Al Sayegh and Amy-Jo Crowley

DUBAI/LONDON – The sale of a stake in the Starbucks franchise for the Middle East, North Africa, and Central Asia, managed by Kuwait’s AlShaya Group, is currently on hold, according to two sources familiar with the matter.

Ongoing boycotts and geopolitical tensions in the region have complicated the franchise’s valuation for potential bidders, and AlShaya is not in a rush to proceed with the sale, one source noted, requesting anonymity due to the confidential nature of the process.

The privately-owned AlShaya Group has been seeking to sell a minority stake of approximately 30% in the business, referred to as "Project Emerald." Discussions may resume next year if the situation improves, indicated a second source.

AlShaya Group has not provided comments on the matter, while Starbucks has stated that it does not engage with rumors or speculation.

Interest in the sale has emerged from U.S. private equity firm Apollo Global Management and Saudi Arabia’s Public Investment Fund (PIF), as previously reported.

In January, Starbucks acknowledged that the Israel-Hamas conflict affected its business in the region, amidst consumer protests and calls for the company to take a stance on the issue. Nonetheless, the company affirmed its commitment to international growth ambitions.

Earlier this year, it was reported that AlShaya Group, which holds the rights to operate Starbucks in the Middle East, planned to lay off over 2,000 employees due to the impact of consumer boycotts related to the Gaza conflict.

The franchise operates around 2,000 outlets across 13 countries, including the Middle East and North Africa, Kazakhstan, and Azerbaijan. In 2022, the unit was valued between $4 billion and $5 billion before exiting the Russian market.

Selling a stake would broaden the investor base for a business that has been under the control of the AlShaya family since 1999.