Published: Sat, February 25, 2017
Markets | By Lucia Cruz

Burger King Buys Popeyes for $1.8 Billion


The owner of Burger King and Tim Hortons restaurants has purchased Popeyes Louisiana Kitchen, according to the company's website.

On Monday, the speculated tie-up was formally confirmed in a transaction that will bulk up Restaurant Brands to become an even bigger player in the quick-service restaurant segment.

The brand "will be managed independently", Restaurant Brands CEO Daniel Schwartz said in a conference call, without taking questions.

Popeyes shareholders will get $79.00 for each share they hold, a 19.5 percent premium to the stock's Friday close.

RBI, which Eater reports bought Popeyes for a cheap $1.8 billion (compared to the $11 billion they paid for Tim Horton's), still has a long journey ahead if it ever wants to overtake the current reigning fast food chicken champion - KFC - but considering the fact that Burger King could easily incorporate Popeyes into its stores, giving us another version of the KFC/Taco Bell/ Pizza Hut combo, it stands to reason that we're about to see new and exciting things in fast food.

OAKVILLE, ON and ATLANTA, GA, Feb. 21, 2017 /PRNewswire/ - Restaurant Brands International Inc.

Restaurant Brands has more than 20,000 locations globally.

Popeyes, whose fans include pop singer Beyoncé, began 45 years ago as a Southern-fried "Chicken on the Run" restaurant in a New Orleans suburb.

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Popeyes has more than 2,600 locations, about double what it had in 2008, and about 97% are franchises.

RBI issued a statement saying, "We will continue developing the brand at an increasing pace in the USA and foreign markets".

"The key to long-term success at Popeyes will be a focus on guest satisfaction and franchise profitability", Schwartz said.

Following the closing of the transaction, Popeyes will continue to be managed independently in the US, while benefitting from the global scale and resources of RBI. "We look forward to taking an already very strong brand and accelerating its pace of growth and opening new restaurants in the USA and around the world".

I am proud of the superior results the Popeyes team has delivered in recent years; they have served all stakeholders well. RBI has observed our success and seen the opportunity for exceptional future unit growth in the USA and around the world.

"The result is a transaction that delivers immediate and certain value to the Popeyes shareholders", she added.

Restaurant Brands said on Tuesday that to finance the deal, it would use the cash on hand and a financing commitment form Wells Fargo and J.P. Morgan.

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