Jollibee buying 51% of Taiwan bubble tea chain
Homegrown fast-food giant Jollibee Foods Corp. (JFC) has signed a deal to acquire 51 percent of profitable Taiwanese bubble tea chain Milksha for about $12.8 million, adding a new brand that can be scaled up as part of its growing multibrand global food and beverage retailing empire.
In a disclosure to the Philippine Stock Exchange on Thursday, JFC announced a deal to buy into Milkshop International Co. Ltd., Milksha’s brand owner and operator, through JFC’s wholly-owned subsidiary, Jollibee Worldwide Pte. Ltd.
The deal is seen to give JFC the “opportunity to participate in this fast-growing beverage category and, together with Milkshop’s founder, grow the Milksha brand globally,” the disclosure said.
One of the cofounders of Milkshop will retain 49 percent ownership of Milkshop. Completion of this transaction is subject to certain closing conditions, and the final purchase price will be confirmed after closing, the disclosure noted.
Milkshop has more than 250 outlets, 231 of which are in Taiwan. It also has presence in Hong Kong, Melbourne, Vancouver and Singapore.
Prior to this takeover deal, JFC bagged the right to exclusively sell and market Milksha in its restaurants in the Philippines.
First introduced in Taiwan in 1987, the bubble tea segment has since grown into a multibillion-dollar industry worldwide. Milkshop’s total prepandemic systemwide sales amounted to about $66.5 million in 2019. In 2020, despite the pandemic, Milkshop’s systemwide sales increased to $74.7 million.
Milkshop is generating modest net income and positive cash flow, the disclosure said.
Founded in Tainan City in Taiwan in 2008, Milkshop is primarily involved in the development, operations and franchising of specialty tea shops under the trade names Milkshop and Milksha.
“Milkshop uses only high-quality milk, carefully- sourced tea and natural ingredients. It produces milk from its own dairy ranch and their bubble is free from chemical additives, preservatives and caramel color. The brewing process varies for each kind of tea to achieve the expected aroma and flavors,” the disclosure noted.
JFC is one of Asia’s largest food service companies with a worldwide network of 5,853 stores with 17 brands operating in 34 countries. In the Philippines, it was operating 3,202 restaurant outlets as of end-September.
Aside from the flagship Jollibee brand, its other brands include Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King (local franchise), PHO24 and Panda Express (local franchise). In China, it operates Yonghe King, Hong Zhuang Yuan, Tim Ho Wan and Dunkin Donuts franchise. It also owns Vietnam’s Highlands Coffee as well as American chains Smashbhurger and Coffee Bean & Tea Leaf.
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