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

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