Dubai Holding LLC, the investment firm owned by the emirate’s ruler, agreed to acquire a minority stake in the operator of Zara clothing and Virgin Megastore chains in the Middle East, according to people with the matter.
The stake purchase in Beirut-based Azadea Group values the business at more than $1 billion, the people said, asking not to be identified as the matter is private. The two parties reached an initial agreement on the transaction last week, the people said.
A spokeswoman for Dubai Holding didn’t immediately respond to requests for comment, while a spokeswoman for Azadea declined to comment.
The acquisition marks a significant shift in strategy for Dubai Holding, which has been mostly focused on selling assets and restructuring debt since Dubai’s property-led crisis. The firm which owns Dubai Properties Group LLC and hotel operator Jumeirah Group LLC, is one of three main state holding companies in the emirate.
Azadea, which was founded in 1978, ran a sale process to sell a 25 percent stake in the business in 2014, according to people familiar with the matter at the time. The company operates more than 500 stores for 50 international franchises for clothing, accessories, food, multimedia, home furnishings and sporting goods brands.