By By Hadeel Al Sayegh and Amy-Jo Crowley
DUBAI/LONDON (Reuters) – The sale of a stake in the Middle East, North Africa and central Asia Starbucks (NASDAQ:SBUX) franchise operated by Kuwait’s AlShaya Group is on hold, two people with knowledge of the process said.
Boycotts and geopolitical unrest in the region continue to impact the franchise, hindering bidders’ ability to value the business, and AlShaya is not in a rush to sell, one of the people said, speaking on condition of anonymity because the process is private.
The privately-owned retailer has been looking to sell a minority stake of about 30% in the business, in a process dubbed “Project Emerald”, Reuters reported previously. The talks could restart next year if conditions improve, a second person said.
AlShaya Group declined to comment. Starbucks said “it does not comment on rumors or speculation”.
The sale has drawn interest from U.S private equity firm Apollo Global Management (NYSE:APO) Inc as well as Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), Reuters has previously reported.
Starbucks said in January that the Israel-Hamas war had hurt its business in the region as some consumers launched protests and boycott campaigns asking the company to take a stance on the issue. However, it added it remained committed to its growth ambitions internationally.
Reuters reported in March that AlShaya Group, which owns the rights to operate Starbucks in the Middle East, planned to lay off over 2,000 people as its business was hobbled by consumer boycotts linked to the Gaza war.
The franchise operates around 2,000 outlets in 13 countries, across the Middle East and North Africa, Kazakhstan and Azerbaijan. The unit was valued at between $4 billion and $5 billion in 2022, Reuters reported previously, before it exited Russia.
A sale of the stake would increase the investor base of the business that has been held by the AlShaya family since 1999.