Jollibee buys controlling stake in Taiwan’s Moon Moon Food

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Jollibee [JFC 264.00, up 1.1%; 110% avgVol] [link] announced that it has signed an agreement to purchase a 70% stake (for ~P184 million)  in the company that owns Moon Moon Food, a “leading brand in Chinese wellness soups” and (according to JFC) a “highly popular restaurant brand in Taiwan, recognized by the Michelin Bib Gourmand for seven consecutive years…” Moon Moon Food has 13 outlets in Taiwan and one in Singapore, and is described by JFC as “profitable.” The acquisition will be made under JFC’s subsidiary, Milksha, and will be consolidated into Milksha’s portfolio and financial statements. Moon Moon Food’s founder (Yung-Cheng Lai) will retain a 30% interest in Moon Moon Food. JFC has a 51% stake in Milksha. JFC said that the acquisition will “reinforce Milksha’s position as a leader in the tea segment in Taiwan by accretively integrating Moon Moon Food’s resources and complementary offerings to enhance its ability to meet evolving company needs, further strengthening scale, valuation, and expanding the consumer base of Milksha.”


MB bottom-line: Taiwan is a very interesting fast food playground. It has a strong presence from all of the usual international suspects (McDonalds, KFC, Burger King, etc), but also a strong domestic scene with brands like Dintaifung that can outperform the global giants in some niche categories. I’m not familiar with the Moon Moon Food brand, but it appears to be doing well in the health food niche and that makes it an interesting add to Milksha’s menu for countries like Taiwan, Japan, and Singapore that have exposure to western fast food but also an interest in “eastern” clean eating sensibilities. While Milksha itself is predominantly a Taiwan-based chain (only 7% of outlets are outside of Taiwan), some popular Milksha menu items are integrated into Chowking’s stores through a licensing agreement, and this deal gives that agreement a little more potential bite. I don’t know that it’s a slam dunk that people going to Chowking are going to want any of Moon Moon Food’s health-conscious menu items, but as an on-again off-again JFC bull, I think this is a relatively cheap add that leverages existing distribution in a way that could pay for itself quickly. 

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