Jollibee Foods to buy remaining 30% in food manufacturing in China

Jollibee Foods Corporation (JFC) is buying the remaining 30 percent equity shareholding in the joint venture Happy Bee Foods Processing Pte. Ltd.

Happy Bee is a joint venture between Jollibee Foods subsidiary Jollibee Worldwide Pte. Ltd. and Hua Xia Harvest Holdings Pte. Ltd.

"With this acquisition, Jollibee Worldwide shall own 100 percent of Happy Bee," Jollibee Foods said in a disclosure to the Philippine Stock Exchange on Wednesday.

Covered by the transaction are more than 3.518 million shares valued at $2.96 per share or $10.413 million.

The joint venture Happy Bee owns 100 percent of the equity interests in Happy Bee Foods Processing (Anhui) Co. Ltd. (Happy Bee Anhui), a wholly foreign-owned enterprise incorporated in the People’s Republic of China.

"Happy Bee Anhui operates a manufacturing facility in Anhui, China that currently services the requirements of JFC’s Yonghe King business and produces and sells food products for business institutions other than JFC's brands," the disclosure read.

A swap deal

The nature of the transaction is essentially an equity share and asset swap deal, which the JFC board approved on Tuesday.

The acquisition is in the form of assets related to the production of food products intended for institutions outside of JFC brands in China.

JFC will not have a net cash outlay for the acquisition of the 30 percent share.

"The objectives of the acquisition of the 30% ownership of Happy Bee... are for JFC to concentrate on supporting the growth of its Yonghe King business and on further improving its food quality and increasing assurance on food safety," Jollibee Foods told the stock exchange.

The current amount of approximately US$10.4 million is subject to adjustments based on the due diligence results on the assets and in accordance with an agreed adjustment mechanism, according to Jollibee Foods.

The transfer of shares and assets are subject government and regulatory approvals which are expected to be completed within 2016. – VDS, GMA News