Exclusive: Saudi PIF in talks to buy stake in UAE supermarket chain Lulu - sources

By Hadeel Al Sayegh and Saeed Azhar
DUBAI (Reuters) - Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), is in early talks to acquire a stake in supermarket chain Lulu Group International, two sources familiar with the matter told Reuters.
It's in talks with Indian-born businessman Yusuff Ali, who founded the Abu Dhabi-based Lulu company, one of the largest chains in the Gulf region.
Talks between PIF and Lulu began four to six weeks ago, one of the sources said.
It was not immediately clear what the stake PIF is looking to buy as the discussions are at an early stage or whether the talks would lead to a final deal.
Lulu operates malls, hypermarkets, and other businesses with annual sales of $ 7.4 billion, according to its website.
The company operates in Saudi Arabia and other Gulf States, as well as Egypt, India, Indonesia and Malaysia.
PIF, which manages $ 360 billion in assets, declined to comment. Lulu's director of marketing and communications V. Nandakumar said in an email response, "As a policy, we never comment on market speculation and media rumors."
Abu Dhabi's state-owned holding company ADQ invested $ 1 billion in Lulu earlier this year, two sources familiar with the talks said. ADQ did not respond to a Reuters request for comment.
PIF is seen as the driver of the Kingdom's Vision 2030 plan to diversify the economy. The authorities want to make it the largest sovereign wealth fund in the world.
The Saudi government plans to expand the kingdom's retail sector to create one million jobs by 2020.
PIF invested $ 500 million in e-commerce company Noon, which soon started operations in Saudi Arabia. It also invested indirectly in the IPO of the Saudi mall operator Arabian Centers <4321.SE>.
Reliance also turned to PIF for a stake in the retail business of Indian billionaire Mukesh Ambani Reliance Industries Ltd. to acquire.
The fund, whose board is led by Saudi Arabia's Crown Prince Mohammed bin Salman, has been a more active investor since 2015. He is investing $ 3.5 billion in Uber Technologies <UBER.N> and investing $ 45 billion in Softbank's first technology fund.

(Reporting by Hadeel Al Sayegh and Saeed Azhar; editing by Jason Neely)
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