Fast food service giant Jollibee Foods Corp (JFC) is confirmed the full ownership of Happy Bee Foods Processing Pte Ltd after it has secured government and regulatory approval in China to buy out its joint venture partner. Its wholly-owned subsidiary, Jollibee Worldwide Pte Ltd (JWL) acquired the remaining 30 percent stake in the China-based food manufacturer Hua Xia Harvest Holdings Pte Ltd., through an equity-and-asset swap deal valued at US$10.4 million.
This move lies in line with the Asian firm’s target as it seeks to rival McDonald to become one of the world’s top 10 fast food brand. Looking at its present oversea growth, the Asian food company has a total operation of 22 commissaries worldwide, that is 15 in the Phillippines, three in China and the United States as well as one in Vietnam. In a statement, the company said that it would continue to pursue an aggressive drive to buy more overseas companies with ticket sizes up to US$100 million.
This acquisition frenzy has begun in 1994 when it first acquired 80% of Greenwich Pizza in the Philippines. Since then, the Filipino fast food chain has more than 10 companies under its belt with its latest acquisition, prior to this, happening late last year at a 40 percent stake in US-based brand Smashburger Master LLC for US$99 million.
But aside from its ambitious appetite, another reason behind this partnership is so that Happy Bee can solely support the continued growth of its flagship restaurant Yonghe King in China, which is one of JFC’s largest business in China with a total of 316 stores which contributes 8 per cent to JFC’s worldwide system-wide sales.
“The objectives behind the acquisition of the 30 per cent ownership of Happy Bee which gave JFC 100 per cent ownership of the food processing facility are to enable JFC to concentrate on supporting the growth of its Yonghe King business and on further improving its food quality and increasing the assurance of its food safety,” says Jollibee’s Vice President Valerie Amante.
Henceforth, with this change in ownership, Happy Bee will no longer produce and sell food products to institutions other than JFC’s restaurant businesses. It is noted that the transaction is basically an asset for equity swap, with Hua Xia selling its 3,518,018 shares in Happy Bee priced at $2.96 per share. The transfer of shares and assets are expected to be completed within 2016.
On another note, JFC added that it is also exploring a joint venture possibility with ISE Foods Inc, a Japanese firm for an egg production facility in the Philippines.
For more information, please visit http://www.jollibee.com.ph/
By Vivian Foo, Unicorn Media
This news is published on Reuters.