SEC okays merger of 3 Jollibee units

The Securities and Exchange Commission (SEC) has approved the plan of Jollibee Foods Corp. to merge three of its major subsidiaries – Chowking Food Corp., Greenwich Pizza Corp. and Baker Fresh Foods Philippines.

The surviving entity would be Chowking, under the name Fresh N’ Famous Foods Inc., which will become the second-largest fastfood service company in the country next to Jollibee itself, accounting for 52 percent of group-wide sales.

The net assets of Greenwich and Baker Fresh will be folded into Fresh N’ Famous as additional paid-in capital.

Pizza and pasta food firm Greenwich has an authorized capital stock of P85 million while Baker Fresh has P21 million in capitalization. Baker Fresh operates the high-end pastry chain Delifrance.

On the other hand, Chowking, which serves Oriental food dishes, has an authorized capital of P400 million.

Based on sales in the first half of 2006, the merged entity will have annual sales of P12.8 billion broken down as follows: Chowking (P8.9 billion), Greenwich (P3.5 billion) and Delifrance (P400 million). It will also have a total of 624 stores across the country. As of end-October 2006), there are 342 Chowking stores, 241 Greenwich outlets and 41 Delifrance branches.

Jollibee said the merger is in line with efforts to enhance operational efficiency and cut costs.

Chowking serves Chinese meals while Baker Fresh, the sole franchisee of the Delifrance brand, serves sandwiches and croissants.

Baker Fresh used to be a joint venture between Jollibee and Delifrance Ltd. until Jollibee bought all of the shares of Delifrance in Baker Fresh recently.

Jollibee chairman and chief executive officer Tony Tan Caktiong will chair the board of Fresh N’ Famous.

Other directors of the merged institution will include Ernesto Tanmantiong, William Tan Untiong, Joseph Tanbuntiong, Rufino Dela Rosa and Edwin Elechicon.

The heads of Chowking, Greenwich and Delifrance business units will continue to serve with their existing management responsibilities.

The Jollibee group has been expanding its business through acquisition and store expansion of existing businesses.

In Oct. 2005, Jollibee acquired 100 percent of Red Ribbon Bakeshop for P1.8 billion. In March 2004, it acquired 85 percent of the Yonghe King restaurant business in the People’s Republic of China for $11.5 million.

Jollibee has set aside P1.5 billion this year for the continued expansion of its operations in both local and international markets, including a commissary in the United States and the establishment of 100 new stores across all its brands.

While the Philippines continues to be its main market, the group also intends to further grow its business in the US and China. It is building its first Jollibee store, the group’s flagship brand, in China.

The group is also exploring opportunities in India and Jakarta, Indonesia. It is also set to open its first Red Ribbon branch in the East Coast, particularly in New Jersey.

Aside from this, the group is planning to acquire two to three new fastfood chains in China, particularly in the noodle and bakeshop businesses.