BreadTalk Group gets regulatory nod for Food Junction buyout

Singapore

MAINBOARD-listed food and beverage player BreadTalk Group has obtained regulatory approval for its buyout of Food Junction, paving the way for the group to become the third-largest food court operator in Singapore.

In a statement on Tuesday, the Competition and Consumer Commission of Singapore (CCCS) said it had found that the combined market share of the parties post-merger remains below 20 per cent. This puts the market share "considerably lower" than those of the larger food court operators such as NTUC Kopitiam and Koufu.

The CCCS said that the transaction will not lead to a substantial lessening of competition within the relevant markets in Singapore.

Instead, the merged entity may be able to "better compete" with the other larger food court operators post-merger.

BreadTalk Group will operate the third-largest food court chain in the city-state following the acquisition, behind the NTUC Foodfare-Kopitiam partnership and Koufu.

Food Junction has 15 outlets in Singapore and Malaysia, with one more to open in Johor in early 2020. BreadTalk Group runs 16 food courts under the Food Republic brand on both sides of the Causeway.

The acquisition, through Bread-Talk Group's subsidiary Topwin Investment, had set the investing public abuzz with its S$80 million price tag when the buyout was announced in early September.

The deal will be paid in cash - funded through BreadTalk Group's internal resources, including available cash on hand, and debt facilities.

As the acquisition is in the ordinary course of business and shareholders' approval is not required, BreadTalk Group will not be convening an extraordinary general meeting to seek the approval of shareholders.

Apart from Malaysia and Singapore, BreadTalk Group also operates food courts in Thailand, Cambodia and China.

With its acquisition approved, the group will see the total number of its food courts increase to 78.

BreadTalk Group shares closed flat at S$0.60 on Tuesday, before the announcement was made by the competition watchdog.