Starbucks, that globally ubiquitous coffee and coffeehouse chain (despite cutting down on international stores this year), is not the only one in the world. There are lots more than that which has branched out from the US. For example, The Coffee Bean and Tea Leaf, which started as a coffee service for business offices in 1963, now has more than a thousand stores operated by or franchised to them across a modest 32-country presence (US included). And in one bold move, an international fast-food chain from the Philippines that has been on an acquisition spree is making The Coffee Bean its newest subsidiary this week.
ABS-CBN News reports that Jollibee Foods Corporation (JFC) is wholly acquiring The Coffee Bean and Tea Leaf for a value that far surpasses all other companies it has bought under its umbrella thus far. The Philippines’ premier fast-food chain announced on Wednesday, July 24, that it will invest $100 million in a holding company based in Singapore in addition to the acquisition deal for The Coffee Bean that is valued at $350 million, or P18 billion. Jollibee founder Tony Tan Caktiong describes the transaction for the coffee chain as their biggest and most multinational acquisition.
Once the acquisition has been settled, Jollibee plans to be able to offer Coffee Bean and Tea Leaf coffee to the total fast-food menu of their restaurants in the Philippines and overseas. But first the parent company will need time to integrate the new subsidiary into the larger organization, a period that on average takes three years judging from the turnaround period of Jollibee’s previous acquisitions. There are concerns from business analysts however, since The Coffee Bean is considered to be “lackluster” in performance at the stock market for two years now, and Jollibee’s own shares went down by 6.74% when trading closed on Wednesday.
Locally, Jollibee Foods Corporation is pretty much secure against other homegrown and foreign-based competitors like KFC and McDonalds due to its multiple chains which include Chowking, Greenwich, Red Ribbon, Burger King and Mang Inasal. Internationally, in addition to the overseas Jollibee fast-foods they have Smashburger in the US which rivals the likes of Shake Shack. On Mexico, they already have almost half-stake on the Tortas Frontera sandwich chain. In the Asia Pacific, Jollibee also acquired the master franchise for the dimsum chain Tim Ho Wan, the “world’s most affordable Michelin-starred restaurant,” spending about P1.74 billion.
Chairman Arsenio Balisacan of the Philippine Competition Commission notes that Jollibee Foods is making sure that their Coffee Bean and Tea Leaf acquisition will comply with the Philippine Competition Act, ensuring fair market competition remains.
Image courtesy of GMA News