Jollibee closes deal with Taiwanese group

MANILA, Philippines - Homegrown fast-food giant Jollibee Foods Corp. will be adding a new restaurant in its growing portfolio of food outlets offering Chinese cuisines after it finalized a deal to buy majority of the Lao Dong group of Taiwan. Jollibee told the stock exchange Monday it had completed the purchase of Lao Dong, where it will be holding a 70% stake for P61.1 million. It has invested an additional P30.6 million in the joint venture, it said in a disclosure. The fast-food company earlier said it had entered into the joint venture to pursue the operation and further expansion of the Lao Dong business in Taiwan, and the introduction of the business to China. Lao Dong, which has eight stores and a commissary in Taipei, has annual sales of T$121.6 million. Jollibee already runs 167 restaurants in China under the Yonghe King, Hong Zhuang Yuan and Chun Shui Tang brands. In September, it announced a plan to borrow $100 million from several banks to fund its investments in China, the first domestic borrowing by the group in seven years. To date, Jollibee has acquired five Chinese stores to gain a foothold in the huge consumer market. Aside from Lao Dong, Jollibee has also completed the purchase of Beijing-based congee restaurant Hong Zhuang Yuan. It also bought Chinese fast-food chain Yonghe King in 2004 and and Chun Shui Tang tea house in 2006. In July last year, the company entered into a joint venture deal with US-based Chow Fun Holdings LLC, where Jollibee will have a 12% stake in the US-based Asian restaurant for $950,000. In the Philippines, Jollibee operates its flagship hamburger and chicken chain under the same name; pasta and pizza store Greenwich; Chinese fast-food chain Chowking; the Red Ribbon bakery; and Delifrance. As of November, the group had 1,497 local stores and 275 stores spread across Hong Kong, China, Vietnam, Dubai, Indonesia and the US. Net profits of the fastfood giant dropped by almost a tenth to P513 million in the third quarter of last year as customers spent less due to rising consumer prices. Monday, Jollibee shares were the top gainer, climbing by more than a tenth or P5.50 to close at P47 apiece. — Kristine Jane R. Liu, BusinessWorld