A whopper deal: Burger King in US$ 3.3 buyout
Burger King Holdings Inc. recently closed a deal worth US$ 3.26 billion to sell itself to 3G Capital, an investment firm that enjoys strong ties with Latin America. The fast-food chain’s chairman and CEO, John Chidsey, stated that the deal will allow it to further and faster expand overseas.
Chidsey, soon to hold the position of co-chairman of the company, said the $24-per-share deal will also bring in 3G Capital’s experience and contacts abroad. Chidsey also told The Associated Press that “Hopefully they’ll be able to even provide more of an accelerant to the fire.”
Over one third of Burger King’s locations are outside the U.S., growing as the company focuses on international expansion. 90 percent of last year’s new branches were build outside the U.S.
Chidsey declined to comment on specific strategies, deferring to 3G Capital. He also failed to comment on potential efforts to cut costs, including possible layoffs. Messages left for 3G Capital weren’t returned but the company told franchisees and investors in a letter on its website that it plans to invest in the brand and highlighted opporunities in Asia and Latin America, while maintaining Burger King’s headquarters in Miami.
Burger King has more than 12,100 locations worldwide and constantly falls behind its far larger competitor McDonald’s Corp. It struggled to keep up with the rival during the economy’s wobbly state for the past two years.
The biggest problem facing Burger King is the high unemployment rate among its most important, but extremely picky, group of customers — young men between 18 and 34, whom it has targeted with big burgers like the 930-calorie BK Quad Stacker and edgy ads featuring the creepy King character.