DUBAI—A group of Persian Gulf investors has agreed to buy a majority stake in the Middle Eastern operator of fast-food brands, such as KFC, Pizza Hut and Hardee's, for about $2.5 billion, just weeks after the deal had appeared to collapse.

The sale of Kuwait Food Co., also known as Americana, would cap a process that started in 2014 and attracted interest from global heavyweight investors including buyout firm KKR & Co. and Singapore's Temasek. The takeover saga came to illustrate the capricious nature of the Middle Eastern market for mergers and acquisitions, where large transactions often get drawn out, or falter at the last moment.

Under the terms of the transaction, the investment group named Adeptio will buy a controlling stake in Americana from an entity owned by the wealthy Kuwaiti Kharafi family at 2.65 Kuwaiti dinars ($8.78) a share, it said late Saturday. The offer represents a 26% premium over its June 15 closing market price. Adeptio will then offer to buy the remaining shares outstanding at the same price, as per Kuwaiti stock market rules.

At the end of May, the two companies had called off the deal, saying they couldn't reach an agreement on the terms.

Adeptio in February had offered to buy a 69% stake in Americana. For the same stake, the group is set to pay about $2.5 billion, which would make the deal the largest in the region this year so far.

Bankers have pinned the blame for the sluggish M&A market in the Middle East on the fall in oil prices and related stock market volatility.

"I think a transaction of this size and complexity provides a timely shot in the arm for the high-end M&A market in the region," said Mohammed Al-Shukairy, a partner at law firm Clifford Chance, which advised the sellers.

The group of buyers is led by Mohamed Alabbar, an Emirati business man who also heads Dubai's flagship developer Emaar Properties, the company behind the world's tallest tower.

Founded in 1964, Americana grew into one of the largest operators of fast-food chains in the Middle East and North Africa with about 1200 outlets, including brands such as TGI Friday's, Pizza Hut, KFC and Hardee's.

The region's food and beverages sector has become a favorite with investors in recent years, as demand for fast food in particular has been on the rise. Smaller deals across the region took place in recent years, for example The Carlyle Group buying food companies in Jordan and Saudi Arabia and Kellogg Co. buying two entities in Egypt.

Write to Nicolas Parasie at nicolas.parasie@wsj.com

 

(END) Dow Jones Newswires

June 19, 2016 21:25 ET (01:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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