Thai Beverage, the spirits giant that makes Chang beer and SangSom rum, is expanding into the fast-food business to take advantage of the rising appetite for fried chicken in Asia.
ThaiBev agreed to purchase more than 240 existing KFC restaurants in Thailand for about 11.3 billion Thai baht ($340 million). 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, according to a filing. 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.
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