(Bloomberg) --

Saudi Arabia’s sovereign wealth fund has emerged as the frontrunner to buy a minority stake in Kuwaiti conglomerate Alshaya Group’s Starbucks Corp. franchise, according to people familiar with the matter. 

The $620 billion Public Investment Fund is leading a consortium of investors vying for a stake in the business and could reach an agreement in the coming weeks, the people said, asking not to be named because the information is private. Private equity firms may invest in the company’s debt alongside the PIF, one of the people said.

Alshaya, which is working with JPMorgan Chase & Co., had indicated they valued the business at $15 billion but prospective buyers expected bids to value it closer to around $11 billion, Bloomberg News has reported.  

No final decisions have been made, and negotiations could still drag on longer or fall apart. Representatives for the PIF and Alshaya declined to comment.

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The PIF is investing in companies across a wide range of industries as part of a key role to diversify the economy away from oil. In May, the fund set up the Saudi Coffee Co. and said it would invest more than $300 million over the next 10 years to raise the kingdom’s annual coffee production to 2,500 tons from 300 tons.

The Starbucks business would offer the PIF instant access to around 1,700 outlets in 14 markets that span some of the biggest emerging economies, from Saudi Arabia to Russia and Turkey. 

Established in 1890 and believed to be Kuwait’s oldest company, Alshaya is one of the Middle East’s largest operators of popular retail brands such as Victoria’s Secret and the Cheesecake Factory. Seattle-based coffee chain Starbucks is Alshaya’s biggest franchise.

The group runs more than 4,000 stores across the region, from Dubai with its cavernous malls to Turkey and Russia, boasting a total of nearly 70 brands. It employs more than 50,000 people and counts H&M, P.F. Chang’s and The Body Shop in its regional portfolio, according to its website.

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