Philippines’ Jollibee buying Coffee Bean & Tea Leaf in overseas expansion

Coffee Bean & Tea Leaf has 1,189 outlets spread across the United States, Southeast Asia and the Middle East, and is rapidly growing in Asia. (AFP)
Updated 24 July 2019

Philippines’ Jollibee buying Coffee Bean & Tea Leaf in overseas expansion

  • CBTL has 1,189 outlets spread across the United States, Southeast Asia and the Middle East, and is rapidly growing in Asia
  • The deal allows Jollibee to be a key player in the large, fast-growing and profitable coffee business

MANILA: Jollibee Foods Corp, Philippines’ largest food service network operator, is buying US brand Coffee Bean & Tea Leaf (CBTL) for $100 million as part of an expansion outside its home market.
Jollibee, which has a market value of nearly $5.5 billion, is buying loss-making CBTL from private equity firm Advent International and other investors including the Sassoon family, a large shareholder in CBTL.
Los Angeles-based CBTL has 1,189 outlets spread across the United States, Southeast Asia and the Middle East, and is rapidly growing in Asia. Nearly three-fourths of its outlets are franchised.
Jollibee will invest $100 million for an 80 percent share in a Singapore holding company that will acquire CBTL. The remaining 20 percent stake will be owned by Jollibee’s partner in its Vietnam coffee and restaurant business.
As part of the transaction, Jollibee will fork out another $250 million, a portion of which was allotted to pay CBTL’s debt. The amount will be paid back by the holding company.
“The acquisition of Coffee Bean & Tea Leaf will be Jollibee’s largest and most multinational so far with business presence in 27 countries,” Jollibee Chairman Tony Tan Caktiong said in a statement on Wednesday.
The deal allows Jollibee to be a key player in the large, fast-growing and profitable coffee business, said Tan Caktiong, adding that the priority is to accelerate Coffee Bean’s growth in Asia. The acquisition will add 14 percent to Jollibee’s global system-wide sales and 26 percent to its total store network, he said.
“They really want to diversify their income stream. At the same time it is a business they know,” said Robert Ramos, senior vice president and trust officer of Eastwest Bank in Manila.
Jollibee believes higher income in the Philippines will support spending on higher-end products like specialty coffee, said Ramos, who helps manage 30 billion pesos ($585.94 million), including an index fund that holds Jollibee shares.
Known for its sweet-style spaghetti, burgers and fried chicken, Jollibee is dominant in the Philippines, outselling McDonald’s and Yum Brands’ KFC. It operates the largest fast-food chain in the Southeast Asian nation with 3,195 restaurants.
Jollibee also has 1,418 stores across various brands overseas. It is expanding overseas, including in China and the United States, by investing in restaurant chains catering to local tastes.
CBTL posted $312.95 million in revenues and $21 million in net losses last year. It had debt of $83.56 million as of end-2018.


RDIF Chief praises Saudi reforms, says Bezos hacking story is ‘Fake News’

Updated 20 min 47 sec ago

RDIF Chief praises Saudi reforms, says Bezos hacking story is ‘Fake News’

  • Said Davos remained in favor of the opportunities presented by Riyadh’s Vision 2030 strategy
  • Bezos allegations dismissed by Saudi officials as “absolutely silly”

DAVOS: One of Saudi Arabia’s biggest investment partners has reassured the global community about doing business in the Kingdom and ridiculed the Jeff Bezos accusations of phone hacking.
Speaking on the sidelines of the World Economic Forum (WEF) annual meeting in Davos, Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), told Arab News that stories about the apparent hacking of Amazon boss Jeff Bezos’ phone did “not look plausible at all.
“We in Russia have some experience of phone hacking and this has all the signs of being fake news put about by enemies of the Kingdom.”
Dmitriev, whose organization has channeled investment into Saudi Arabia and partnered the Kingdom on billions of dollars-worth of joint ventures, said the people he had spoken to in Davos remained in favor of the opportunities presented by Riyadh’s Vision 2030 strategy.
“Lots of people here are positive about the changes going on in Saudi Arabia, both from the West and Asia. They are interested in the business opportunities presented by tourism, the improved position of women and the youth demographic. I’m surprised the Western press does not give the full picture about what is happening in Saudi Arabia,” he added.
While in Switzerland, the RDIF announced a deal to invest in an online tourism platform that would benefit from increased Russian tourism, especially by members of Russia’s big Muslim minority, as well as other potential visitors to Saudi Arabia.
The Bezos allegations, which have been dismissed by Saudi officials as “absolutely silly,” were a hot topic of conversation at the WEF meeting.
A Western executive at a leading Gulf energy company, who declined to be named, said: “Phone hacking and cyber-security is a growing problem in the business world and is not confined to any one country.
“You have to take it all with a pinch of salt. If you’re going to do business in Saudi Arabia you will look at all the pros and cons, and this (the Bezos allegation) is not likely to deter you.”