Brazil’s Popeyes operator to acquire Starbucks for US$22.7M

BRAZIL- Zamp, Popeyes and Burger King operator in Brazil has announced a deal to acquire Starbucks Brazil for BRL 120 million (US$22.7 million) from SouthRock Holdings. 

The operator entered talks with SouthRock in February over the sale of Starbucks Brazil after the coffee chain went into bankruptcy protection in 2023. 

However, Zamp is yet to disclose how many of the 100 Starbucks stores will be purchased via the acquisition. The operator only revealed the deal will involve rights and assets that are part of the coffee chain’s operations.  

The deal will adhere to bankruptcy proceedings, which require a competitive bidding process. The fast-food chain operator will be required to match higher bids before the acquisition is made final. However, Zamp enjoys the backing of UAE’s sovereign wealth fund, Mubadala. Mubadala’s capitalization capabilities means there is a very low likelihood of the deal’s failure. 

The agreement also requires Starbucks’ approval, which has authorized Zamp to explore the acquisition. Starbucks has not offered such authorization to any other potential investor. It also requires approval from the Administrative Council for Economic Defense (CADE), Brazil’s antitrust watchdog.  

In a statement, SouthRock confirmed the agreement, stating it is committed to adhering to court proceedings and restructuring requirements, albeit pending approval.  

SouthRock has faced significant financial troubles in the past year. The holding company filed for bankruptcy in November last year after failing to pay BRL 1.8 billion (US$342 million) in debt.  

Subway Brazil, also operated by SouthRock, also filed for bankruptcy in March after failing to pay BRL 482 million (US$91.6 million). 

The holding company managed to evade bankruptcy for its Eataly restaurant and retail group. SouthRock managed to sell the restaurant for BRL 15 million (US$2.8 million) after failing to repay its debt. 

The deal was announced a few months after Mubadala closed commitments for its second investment fund in Brazil, raising US710 million. The funds are expected to help enhance Mubadala’s presence in South America through investing in mature companies like Starbucks Brazil, plagued with serious financial distress.  

Zamp’s share price increased by 19.4% shortly after the acquisition’s announcement and closed the day with a 10.2% gain. 

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