MANILA, Philippines?Local fast-food giant Jollibee Foods Corp. is taking over a majority stake in 34-store Chinese food chain San Pin Wang in South China, its third restaurant brand in the mainland.
JFC, through its wholly owned subsidiary Jollibee Worldwide Pte Ltd., disclosed Wednesday a deal to acquire from its existing Chinese partner 55 percent of Guanxi San Ping Wang Food and Beverage Management Co. Ltd., which operates the San Pin Wang beef noodle business for 30 million renminbi (P195 million).
The agreement with the Chinese partner, Guangxi Zong Kai Food Beverage Investment Co. Ltd. (GZK), is subject to completion of certain conditions, the company told the Philippine Stock Exchange.
San Pin Wang is a fast-food chain serving Chinese cuisine, primarily low-priced beef noodles. Its 34 stores are located mostly in Nanning City in Guang Xi Province in South China.
JFC said this agreement was in line with the framework agreed upon with GZK last April for the eventual joint ownership of San Pin Wang. Upon closing, while JFC?s unit will own 55 percent of the business, GZK will keep a 45-percent stake.
Apart from the RMB 30 million that JFC will shell out to acquire the 55-percent stake, it will jointly invest with GZK another RMB 20 million (P130 million) for the expansion of the food chain. The joint venture is expected to be operational within the first quarter of 2011, the disclosure said.
The Jollibee group presently owns and operates two food businesses in China?Yonghe King, which was acquired in 2004, and Hong Zhuang Yuan, which was bought in 2008. As of end-September, the two businesses combined had a total of 236 stores and accounted for 12 percent of JFC?s worldwide sales in the third quarter. The group has 1,953 stores across the globe.
JFC is ramping up its overseas expansion despite the global economic uncertainties. It is aiming to jack up the share of offshore sales to 50 percent in about eight years. Its international strategy is to bring the Jollibee, Chowking and Red Ribbon brands to markets with heavy concentration of overseas Filipinos and expand in fast-growing markets such as China by acquiring homegrown brands and expanding them.
The group operates the Philippines? biggest food-service network. As of September, it had 1,578 stores in the country?703 under the Jollibee brand, 404 under Chowking, 218 under Greenwich and 215 under Red Ribbon. Delifrance and Manong Pepe?s had 23 and 15, respectively. JFC has since then signed a deal to give up the Delifrance franchise.