Jollibee Food Corps, Philippines’ biggest fast food company, announced today that it is acquiring Coffee Bean & Tea Leaf (CBTL).
It will be pumping out US$350 million to buy over the money-losing US coffee chain, marking Jollibee’s largest acquisition till date.
Of this sum, Jollibee is using US$100 million to buy an 80% stake in a Singapore holding company which will fully acquire CBTL.
Jollibee’s partner in its Vietnam coffee and restaurant business will own the remaining 20% stake.
The other US$250 million spent is allotted to pay off CBTL’s debt, and will later be paid back to Jollibee by the holding company.
This acquisition comes as part of Jollibee’s plans to further expand its operations beyond its home market.
CBTL is set to become Jollibee’s second largest business, behind its Jollibee fast food brand, and will bump up the firm’s global sales by 14% according to Jollibee chairman Tony Tan Caktiong.
Tan said they expect this will grow their store network by more than a quarter, and take Jollibee “closer to its vision to be one of the top five restaurant companies in the world in terms of market capitalisation”.
It will also help Jollibee, which already operates some coffee brands like Highland Coffee in Vietnam, to strengthen its hold in this industry and “become an independent player in the large, fast-growing and profitable coffee business”.
Jollibee has an extensive 3,195 outlets throughout the Philippines, as well as 1,418 more outlets across its various brands overseas.
CBTL on the other hand has 1,189 outlets across the United States, Southeast Asia and the Middle East.
Featured Image Credit: Bilyonaryo/Daily Coffee News