Food service behemoth Jollibee Foods Corp (JFC) has taken full ownership of Happy Bee Foods Processing Pte Ltd after its wholly-owned subsidiary Jollibee Worldwide Pte Ltd (JWL) acquired the remaining 30 per cent stake in the China-based food manufacturer.
A Singapore corporation, Happy Bee in China operates a manufacturing facility in Anhui that services the requirements of JFC’s Yonghe King business and produces and sells foods for business institutions other than JFC’s brands.
JFC disclosed that JWPL obtained governmental and regulatory approvals in the People’s Republic of China for the transfer of assets in Happy Bee Foods in Anhui, China, and completed the transfer of shares in Happy Bee Foods in Singapore.
JWPL previously owned 70 per cent of Happy Bee Anhui, while the remaining 30 per cent was owned by its partner Hua Xia Harvest Holdings Pte Ltd (Hua Xia).
The Philippine-listed food titan bought the remaining 30 per cent stake in Happy Bee Anhui for over $10.3 million.
With the change in ownership, Happy Bee will no longer produce and sell food products to institutions other than JFC’s restaurant businesses. It noted that the transaction is basically an asset for equity swap, since JFC has minimal net cash outlay for the latest acquisition.
“The objectives of the acquisition of the 30 per cent ownership of Happy Bee which gave JFC 100 per cent ownership of the food processing facility are to enable JFC to concentrate on supporting the growth of its Yonghe King business and on further improving its food quality and increasing the assurance of its food safety,” JFC said in its statement.
Yonghe King is JFC’s largest business in China with a total of 316 stores as of October 31, 2016 and contributes 8 per cent to JFC’s worldwide system wide sales. Happy Bee Anhui produces the food products sold at Yonghe King stores.
JFC operates a total of 22 commissaries worldwide: 15 in the Philippines, three each in China and the US, and one in Vietnam. It is also building three additional commissaries in Luzon Island in the Philippines and a joint venture poultry processing plant in a joint venture with Cargill.
JFC added it is also exploring a joint venture with ISE Foods Inc, a Japanese firm for an egg production facility in the Philippines.
“In JFC’s business model, it builds and operates food processing facilities that supply exclusively the food served in its restaurants,” JFC explained. “This structure is intended to ensure superiority of food quality, food safety and product innovation.”
JFC last traded at P210 per share on Wednesday.