Jollibee acquire mang inasal

Jollibee acquires Mang Inasal The country’s biggest food retailer is acquiring majority control of a fast-growing barbeque fastfood chain in a continuing bid to beef up its business portfolio.
Jollibee Foods Corporation (JFC) disclosed to the Philippine Stock Exchange that it is acquiring 70% of the shares of Mang Inasal for Php3 billion. This came as a surprise to many people, which stockbrokers, analysts, investors, and ordinary consumers.

Mang Inasal found success as a fastfood chain offering barbecue chicken. Started in 2003, the company now has 303 stores in the Philippines, all but 24 of which are franchised outlets. It has revenues of P2.6 billion and system-wide sales of P3.8 billion a year.

Jollibee said it would pay P200 million in downpayment to the owner of Mang Inasal Philippines, Injap Investments, led by Edgar Sia III. Around 90% of the balance will be paid upon closing of the agreement, with the remaining 10% to be paid three years onward after the deal is reached. The parent company will continue to hold 30% of Mang Inasal.

The news comes in the heels of a recent announcement from Jollibee that it will terminate its Delifrance franchise unitin 2011 and news that Mang Inasal will go public (Initial Public Offering) also next year. Jollibee Foods Corporation, as of July 31, 2010, has a total number of 1,582 store branches in the Philippines: Jollibee (702); Chowking (406); Greenwich (221); Red Ribbon (215); Delifrance (23); and Manong Pepe’s (15).

Reasons why Jollibee acquires / Bought Manq Inasal :

Jollibee considered Mang Inasal more of a threat than Mcdonald’s. This is mainly because Mang Inasal was one of the few restaurant chains that would put up a branch anywhere there was a Jollibee. If you think about it there’s definitely an overlap between the customers of Jollibee and Mang Inasal. These are the people who want value for their money and nothing beats Mang Inasal’s Unlimited Rice (especially for Filipinos).

In order to strengthen their market in the fast food industry, Jollibee started to veer their focus. Instead of focusing on how to satisfy their customers more and improving their products, they increased their profits abundantly by purchasing other food companies.

Merging and acquisitions seemed to have been an effective strategy for Jollibee not only because of its dominance but also because of numerous other reasons . Merging and acquisitions increases revenue through decreased manufacturing and human labor cost.