Philippines' Jollibee takes over US burger chain
$100m deal brings Jollibee's stake in Smashburger to 85%
CLIFF VENZON, Nikkei staff writer
MANILA -- Philippine fast-food group Jollibee Foods has bought a controlling stake in U.S. burger chain Smashburger.
Jollibee on Tuesday told the Philippine Stock Exchange that it has acquired a 45% stake in Smashburger parent SJBF from Smashburger Master. The $100 million deal, which has yet to be approved by U.S. authorities, brings Jollibee's stake in SJBF to 85%.
Smashburger Master sold a 40% stake in the chain to Jollibee in 2015. It retains 15% ownership.
"JFC [Jollibee Foods Corporation] will be able to participate in the very large mainstream American consumer market in addition to serving Filipino-Americans there," the company said.
With the deal, U.S. sales will account for 15% of Jollibee's total sales, up from 5%. In addition, Jollibee's international operations will contribute 30%, up from 20%.
The fast-internationalizing Jollibee, which outsells Western fast-food brands like McDonald's in the Philippines, aims to do 50% of its business overseas by 2020.
Jollibee began in the 1970s as an ice cream parlor in Manila. It was started by Tony Tan Caktiong, who remains the company's chairman, and now operates in China, Southeast Asia and the Middle East, where many overseas Filipinos work.
Smashburger has 365 outlets and will bring Jollibee's total store count to 4,162. The consolidation of Smashburger will also expand Jollibee's geographical presence to 21 countries from 16, adding Costa Rica, Egypt, El Salvador, the U.K. and Panama.
On Tuesday, Jollibee reported that its 2017 net income attributable to equity holders of the parent company grew by 15% to 7.1 billion pesos ($136 million), with total group sales jumping 15.2% to 171.8 billion pesos.
Jollibee said it will spend 12 billion pesos to ramp up store openings this year. The company invested 8.8 billion pesos in 2017, when it added 465 new stores in the Philippines and abroad.
Shares of Jollibee dropped 2.12% on Tuesday while Manila's benchmark index jumped 0.97%.