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Author: kimeng   |   Latest post: Thu, 19 Jul 2018, 09:51 AM

 

Thai Beverage: Potential Acquisition of KFC Stores in Thailand

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Thai Beverage announced that they have entered into an agreement with Yum Restaurants for the potential acquisition of over 240 existing KFC stores in Thailand at a preliminary consideration of THB11.3b (approx. S$463m). A number of developing KFC stores in Thailand are also up for consideration.

Besides expanding its food business into the quick service restaurants (QSR) segment, we believe the group can leverage on KFC’s network to directly distribute its portfolio of beverages to customers in this segment.

The group also believes they would be able to closely understand the consumption trends that are crucial towards sustaining growth of their overall business.

The acquisition will be funded via a combination of internally generated cashflow and external bank borrowings, and it is expected to be completed by the end of Dec-17.

With Thai Bev’s results to be released this Friday after market close, we are keeping our BUY and S$1.01 FV unchanged.

Source: OCBC Research - 10 Aug 2017

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Labels: ThaiBev

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