Saudi Arabia could buy stake in huge UAE supermarket chain Lulu: report

Saudi Arabia could buy a stake in UAE supermarket chain Lulu - one of the biggest and most well-known retail brands in the Gulf region - in another push by the kingdom to create the world's biggest sovereign wealth fund.

Discussions between the Public Investment Fund (PIF), which is headed by Crown Prince Mohammed bin Salman, and Lulu Group International founder M.A. Yusuff Ali began six-weeks ago, Reuters reported.

The talks come as the sovereign wealth fund looks to diversify its holdings and the kingdom seeks to boost its retail sector.

It is not clear what size a stake the PIF is interested in acquiring in the UAE-based chain - or whether the negotiations will lead to a buy-out - but the talks come on the back of a $1 billion investment in Lulu by Abu Dhabi state-owned holding company ADQ.  

Lulu is one of the Gulf region's biggest retail chains with a reported annual turnover of $7.4 billion, according to their website.

The PIF has some $360 billion in assets and it looking at further expanding its holdings to help fund the crown prince's Vision 2030 and expand the kingdom's economic clout. 

It has stakes in some of the world's largest companies, including arms manufacturers, investment firms, and emerging technologies, such as Tesla.

But the PIF has been dogged by controversy due to the chairmanship of MbS and the critical role the fund plays in the crown prince’s economic and political ambitions.

The crown prince has been linked to the murder of Saudi journalist Jamal Khashoggi and the detention of numerous human rights and pro-democracy activists.

There has also been strong resistance in the UK to the PIF's planned takeover of English football club Newcastle United, with pressure on the Premier League to reject the bid.

M.A. Yusuf Ali founded the first Lulu in Abu Dhabi in 1995 and soon expanded into other Gulf states such as Oman and Qatar to make it one of the most-recognisable retail names in the region.

Last year he became the first person to receive a UAE "gold visa", as the Gulf state offers its wealthiest expats permanent residency for a hefty price.