Philippines’ fast-food giant Jollibee acquires 40 percent stake in US burger chain Smashburger
Jollibee Foods, one of the leading fast-food giants in Philippines, has acquired a 40 percent stake in the U.S hamburger brand, Smashburger. The deal is worth US$99 million (AU$137.9 million).
Jollibee sells hamburgers, fried chicken and spaghetti. In a statement, Jollibee confirmed that it acquired a part of Smashburger, which has 339 restaurants in the United States, Canada, the Middle East and South America.
US presence
For Jollibee, this will be the largest-ever acquisition outside of the Philippines, according to the company, the AFP reported.
“This acquisition will make (Jollibee's) presence in the US more significant, going beyond the Filipino market and serving the mainstream consumers in the $100 billion US burger market,” company chairman Tony Tan Caktiong said.
Jollibee, set up in 1978, has been a hugely growing company and was able to beat competition from major foreign fast-food chains. It has successfully maintained its hold over the Philippine market and owns 880 plus outlets, including those in the US, the Middle East and Southeast Asia.
In the past, Jollibee acquired many local rivals, including Chinese food chain Chowking and pizza chain Greenwich. It also runs joint ventures in restaurant chains based in China, Vietnam, Indonesia, Cambodia and South Korea.
Smash burger view
In a statement, Smashburger Chief Executive Scott Crane said the agreement will help in accelerating Smashburger’s international expansion, though its initial focus will be on maintaining the domestic growth.
Smashburger is planning to open 80 restaurants in 2016 in which 10 of them will be outside the U.S. The CEO said the deal has given an investment partner, which is good for the company, rather than going public. It is the right way to “grow smartly without worrying about the volatility of the stock market," the CEO added, reports the Wall Street Journal.
Starting at Denver in 2007, Smashburger scripted a success story as it took on established fast-food operators by offering fresh and natural ingredients.
Jollibee operates a big chain of restaurants, including Burger King Philippines. It has been keen on seeking investment from a U.S. growth brand, added the report from Wall Street Journal.
While speaking to shareholders in June 2015, Jollibee Foods Corp. chairman Tony Tan Caktiong had said the company's vision is to become one of the top five quick-service restaurants in the world, on the basis of market capitalisation.
Caktiong also said the company is focusing on three main markets-- Philippines, China and the U.S. and the future expansion will be driven by joint ventures and acquisitions, reported Down Jones News.
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