RBI acquires Popeyes

The Tim Hortons and Burger King parent company extends its reach into the growing chicken market.
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Restaurant Brands International, the parent company of Burger King and Tim Hortons, has reached a deal to acquire fried chicken QSR chain Popeyes Louisiana Kitchen.

There had been rumours for the past week about the deal, which was reached this morning, with RBI acquiring Popeyes for $79 per share in cash, or $1.8 billion. The deal is still subject to regulatory approval but is expected to close in April.

Like Tim Hortons and Burger King, Popeyes will continue to be managed independently, while also “benefitting from the global scale and resources of RBI,” according to a press release.

Popeyes has more than 2,600 locations globally across 26 markets. Over 1,900 of those are in the U.S., with over 70 spread across Canada, mostly in Ontario. According to Popeyes’ most recent annual report for 2015, Canada is one of the company’s best-performing international markets, but shares that honour with Turkey, Latin America and South Korea. The same report pegged roughly half of its revenues coming from international markets.

Expansion into new markets has been a major priority for Restaurant Brands, and being able to take advantage of Burger King’s global reach was a big incentive for Tim Hortons to join it in the deal that formed the QSR giant. Since the merger, Tim Hortons has announced expansion plans into the Philippines, Mexico and the U.K. The press release announcing the Popeye’s deal stated developing the brand both in the U.S. and internationally would be a priority in the years to come.

While Popeye’s has typically fallen behind KFC and Chick-fil-A when it comes to market share in the growing QSR chicken market in the U.S., Popeyes’ share is growing, and the company has benefited from a strong international presence and, as cited in the release, “strong customer loyalty.”

“Popeyes is a powerful brand with a rich Louisiana heritage that resonates with guests around the world,” said Daniel Schwartz, CEO of RBI. “With this transaction, RBI is adding a brand that has a distinctive position within a compelling segment and strong U.S. and international prospects for growth.”

The deal is welcome good news for RBI’s biggest shareholder 3G Capital, which last week saw a bid for another subsidiary, The Kraft Heinz Company, to acquire Unilever rejected.

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