Published: Sat, February 25, 2017
Markets | By Terence Owen

Burger King Is Officially Buying Popeyes And Now The Possibilities Are Endless

Burger King Is Officially Buying Popeyes And Now The Possibilities Are Endless

Given 3G's history as a serial acquirer, the $79 per share deal is unlikely to be its last.

Wall Street seemed to think the deal will be good for Restaurant Brands as well. "They're going to look to build the company through accretive acquisitions". You thought there was a Popeyes in every town - maybe even in every neighborhood - what with how awesome the quality of their fast food is and how delicious the commercials make it look every time they interrupt the TV show you're now watching to remind you that sweet tea and thighs are available nearby. And Warren Buffett's Berkshire Hathaway has a almost 4% stake.

One of the things that makes Popeyes attractive is the opportunity for expansion, as it only had 621 worldwide locations at the end of 2016.

It's a deal made in fast-food heaven:, the corporate entity behind Burger King and, is acquiring for a whopping $1.8 billion.

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"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", said Restaurant Brands CEO Daniel Schwartz in a statement. As Popeyes becomes part of the RBI family we believe we can deliver growth and opportunities for all of our stakeholders including our valued employees and franchisees. Restaurant Brands has found this approach very successful with Tim Hortons and Burger King, as it generates high margins and strong cash flows.

"We will adjust to increased costs just like we have before", she said. "The team has done a great job setting the foundation for future growth". However, in recent years, Popeyes has struggled to keep up their growth.

Kraft Heinz Co. recently tried to buy rival Unilever Plc for US$143 billion, and while that transaction was abandoned with the price tag deemed too low, there is surely more to come, both in the packaged food sector and the fast food space.

It's a good thing Popeyes Louisiana Kitchen (PLKI) was bought by Restaurant Brands International (QSR) on Tuesday because its 2016 fourth quarter earnings were far from savory. The stock is up more than 20% in 2017. Shares rose more than 7% Tuesday. Popeyes shares on the Nasdaq composite closed Friday at US$66.12.

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