Domino's Australia (ASX:DMP) to purchase Taiwanese counterpart

Company News

by Michael Luu

Australia’s largest pizza maker Domino’s Pizza (ASX:DMP) is set to add Taiwan to its global portfolio of markets under its master franchise.

The world’s biggest Domino’s license holder has clinched a $79 million deal to acquire the assets and franchise license held by Domino’s Taiwan.

Domino’s Australia said, “This is a market with tremendous opportunity for our business and this acquisition provides similar opportunity for the local team”.

The Taiwanese counterpart currently operates the second largest pizza-making network in the territory. The enterprise’s chain of 138 franchised stores and 19 corporate stores generated an estimated $73 million in gross revenue for the previous fiscal year.

Domino’s CEO and MD Don Meij spoke about the company’s development approach to the new acquisition, “We intend to expand the store footprint through opening more corporate stores, introducing new, internal, franchisees to the network, helping existing franchisees profitably expand their businesses, and investing in the network and our people to drive long term growth.“

Domino’s Australia considers this move to be complementary to the pizza chain operator’s expansion strategy in the Asia Pacific region, where the $9.9 billion ASX-listed company already has footprints in Australia, New Zealand and Japan.

Regional procurement, supply chain and operational synergies with the Japanese operations are expected to boost earnings for Domino’s Taiwan and the whole parent company’s presence in East Asia.

Local authorities are assessing the transaction and its impact on competition in the Taiwanese market. If Domino’s Australia receives the green light, the deal is expected to be finalised before the end of the calendar year.

The pizza manufacturer’s European portfolio includes franchise rights and stores in Belgium, France, the Netherlands, Germany, Luxembourg and Monaco. Domino’s Pizza has an active acquisition pipeline, as the company endeavours to extend market reach from its existing 2600 stores under management.

Shares in Domino's Pizza (ASX:DMP) last traded at $114.05
 

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