Abu Dhabi Investor Backs Brazilian Chain's Acquisition of Starbucks Brand

In a move that could reshape Brazil's coffee landscape, Zamp, a restaurant chain operator backed by Abu Dhabi's sovereign wealth fund Mubadala, has struck a deal to acquire the rights to operate Starbucks stores and brand in the South American nation. The agreement, announced on Thursday, sent Zamp's shares soaring, reflecting the potential of the acquisition.

Zamp, already a major player in the Brazilian fast-food market with Burger King and Popeyes franchises, is eyeing significant growth with the Starbucks deal. The company did not disclose the exact number of Starbucks outlets included in the acquisition, but there are currently over 100 stores across Brazil. The deal value sits at 120 million reais ($22. 7 million), with Zamp acquiring the assets and rights from SouthRock Group, which has been under bankruptcy protection since last year.

The acquisition process, however, faces a few hurdles. Zamp's right to acquire the Starbucks brand and stores hinges on approval from Brazil's antitrust watchdog, known as CADE. Additionally, the deal is subject to the ongoing court proceedings surrounding SouthRock's bankruptcy. Zamp might encounter competition during this court-mandated process, with the right to match any higher bids for the Starbucks assets.

Analysts see the deal as a strategic win for Zamp, allowing them to leverage Starbucks' strong brand presence and loyal customer base in Brazil. Starbucks has struggled to maintain a steady foothold in the country in recent years, facing challenges like intense competition and economic fluctuations. Zamp's experience in operating successful fast-food chains in Brazil, coupled with Mubadala's financial muscle, could be the key to Starbucks' revival in the region.

Zamp, on the other hand, benefits from Starbucks' established premium coffee market share in Brazil. By integrating Starbucks into its existing portfolio, Zamp can cater to a wider customer base, offering both quick-service meals and specialty coffee experiences. The acquisition aligns with Zamp's strategy of expanding its presence in the beverage segment, and Starbucks' brand recognition could significantly boost its market reach.

While the final number of acquired stores remains unclear, industry experts believe Zamp will prioritize outlets in prime locations with high foot traffic. This strategic selection would allow Zamp to maximize Starbucks' brand potential and profitability in Brazil. The deal, if approved, is expected to be finalized in the coming months, and coffee enthusiasts in Brazil are eagerly waiting to see how this acquisition shapes the country's coffee scene.

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