THAIBEV TO BUY KFC RESTAU­RANTS

Spir­its gi­ant will take over 240 out­lets in Thailand for 11.3b baht to cash on ris­ing ap­petite for fried chicken in Asia

New Straits Times - - Business -

BANGKOK restau­rants in Thailand for 11.3 bil­lion baht (RM1.4 bil­lion).

A deal is also in place for the com­pany to take over stores that are be­ing de­vel­oped, with the cost of those lo­ca­tions to be de­ter­mined when the trans­ac­tion closes.

KFC is op­er­ated by Louisville, Ken­tucky-based Yum! Brands Inc, which also runs the Taco Bell and Pizza Hut chains.

Bil­lion­aire chair­man Charoen Siri­vad­han­ab­hakdi, who founded the com­pany, has been seek­ing to di­ver­sify ThaiBev’s op­er­a­tions for years, with a goal of gen­er­at­ing more rev­enue from non­al­co­holic bev­er­ages by 2020.

The fast-food push comes as Western restau­rant com­pa­nies in­creas­ingly target Asia as a key mar­ket for growth.

For Thai Bev­er­age, the KFC deal is a bid to seize on the pop­u­lar­ity of chicken in Asia, ac­cord­ing to Nir­gu­nan Tiruchel­vam, a di­rec­tor at Reli­gare Cap­i­tal Mar­kets in Sin­ga­pore.

“The KFC ac­qui­si­tion is a very good way of ex­pos­ing one­self to the rise of quick-ser­vice restau­rants in Asia, es­pe­cially the rise of chicken con­sump­tion,” he said.

Emerg­ing-mar­ket de­mand for KFC is strong, and the con­cept has a lo­cal fo­cus in each mar­ket.

Yum, which spun off its China divi­sion last year, is seek­ing to ac­cel­er­ate de­vel­op­ment of its Pizza Hut, KFC and Taco Bell brands, par­tic­u­larly in over­seas mar­kets.

At the same time, Yum aims to be­come 98 per cent fran­chised by the end of fis­cal 2018.

Thailand ac­counted for two per cent of KFC’s sales in emerg­ing mar­kets last quar­ter.

It was the only re­gion in that divi­sion that saw sales drop yearover-year, post­ing a two per cent de­cline. Bloomberg

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