MANILA, PHILIPPINES – The much-loved homegrown brand Jollibee Food Corp. has formally acquired California-based The Coffee Bean & Tea Leaf, following a $350-million deal. This marks JFC’s largest acquisition to date with the specialty coffee brand’s global presence in 27 countries, but investors show mixed reactions to this new business venture.
After JFC’s announcement of Jollibee Worldwide Pte. Ltd. (JWPL) investing $100 million to a Singapore-based holding firm to acquire 100% of the CBTL brand with the remaining balance to be in the form of advances to the new firm, JFC’s stocks dropped 7.99% shortly after the announcement, which experts suggest could be the effect of CBTL’s own stocks being added into the mix.
Annual reports of the International Coffee & Tea Leaf, which owns the coffee chain, reflected a $21 million loss in 2018, painting a not-so bright future for the group as a whole. With CBTL’s shares steadily dropping, analysts say the market is divided as to whether or not JFC will be able to turn the game around for its newest acquisition.
This general sentiment among investors also comes after Jollibee’s acquisition of US-based burger chain Smashburger last December, whose losses have yet to be reversed.
However, Marvin Germo, Stock Market Trader, and Bestselling Author of Stock Smarts believes otherwise:
“Jollibee and Mang Inasal are earning so well that it gives Smashburger runway to be fixed and tweaked without affecting growth. The same is true with CBTL, CBTL has over 1,000 branches in 27 countries, this positions Jollibee in so many markets where they were not in before. I believe Jollibee will leverage Asia and will double down in this area where there is massive consumption growth.”
Ultimately, JFC remains to be the Philippines’ largest food service network with Red Ribbon, Chowking, Greenwich Pizza, and Mang Inasal among its roster of business ventures, along with owning shares in beloved franchises like Dunkin Donut, Tim Ho Wan and more. This new business move has sure made its impact to its stocks, but knowing Jollibee’s profitability and marketability, this is nothing that they can’t turn around.
