Sao Paulo’s Zamp to Acquire Starbucks Brazil from SouthRock

Zamp, which operates fast-food chains Burger King since 2011 and launched Popeyes in 2018 across Brazil, on Thursday announced the signing of an agreement to purchase the assets of Starbucks Brazil from holding company SouthRock for $22.7 million.

Zamp, which operates more than 900 Burger King outlets and over 50 Popeyes stores, is owned by the UAE-based Mubadala Capital, a subsidiary of Mubadala Investment Company.

Mubadala Capital has raised its stake in Zamp to 58% after investing around $200 million in Zamp alongside Affinity Partners, and is likely to make further investments in the company.

Zamp has been negotiating terms to acquire Starbucks business in the South American country since February 2024, after the coffee chain’s Brazilian franchisee SouthRock declared bankruptcy in December 2023.

Total Investment May Change

In a securities filing in Sao Paulo on Thursday, Zamp said that the sum of the purchase could be subject to change depending on how many of approximately 130 Starbucks stores, net debt and inventory it acquires when the deal is finalised. 

It may be recalled that in March 2024, Subway Brazil, one of the brands under SouthRock’s umbrella, filed for bankruptcy protection reporting more than $91.65 million in debt. In November last year, SouthRock itself filed for bankruptcy protection claiming it was unable to repay $340 million in debt after losing its rights to the Starbucks brand.

In February this year, SouthRock managed to exclude the Eataly restaurant and retail group, another of its international brands, from the bankruptcy proceedings and sell it to a fund for $2.85 million.

While other bids to buy SouthRock’s Starbucks assets could be made, Zamp said it has reached an understanding with Seattle-based Starbucks regarding its plan to operate and develop the brand in Brazil. Zamp also has the right to match potentially higher bids, according to the filing.

Starbucks opened its first store in Brazil in 2006 at Sao Paulo’s Morumbi Mall. The US coffee giant entered a franchise partnership with SouthRock in 2018, which reached 197 outlets across the country at its peak.

However, having accrued debts of $363 million during the pandemic, SouthRock began shuttering stores in 2023 and operated approximately 130 outlets in the fourth quarter of 2023. Zamp currently operates more than 900 Burger King stores and over 50 Popeyes outlets.

Mubadala Capital Brazil has invested over $5 billion in Brazil since 2012, according to Mubadala Capital, the $20 billion global asset management firm. Mubadala Investment Company also has plans to invest over $12 billion in Brazil’s biofuels sector.