Global and branding missions for Burger King after £2.6bn takeover
6 September, 2010
Burger King is likely to push beyond its north American heartlands after a $4bn (£2.6bn) takeover bid by Brazilian-backed investment group 3G.
The investors are likely to step up Burger King’s estate of around 12,200 restaurants, of which only a third are currently outside of the US and Canada, with any expansion likely to start in their home continent of Latin America.
In the UK—as around the world—the challenge for Burger King will be to re-energise its brand in the face of competition from a resurgent McDonald’s. Sales and profits at the chain have slipped lately, while McDonald’s has turned in successive quarterly increases. Announcing a worldwide sales drop of 2.3% in the year to the end of June, Burger King identified the US and western Europe as particularly challenging territories for the company in light of the recession.
Burger King currently has around 500 restaurants in the UK, and some analysts have suggested that the chain would be well advised to follow McDonald’s in overhauling its menu offer and freshening up its restaurants to reflect changing and more health-conscious public tastes. As well as McDonald’s, Burger King has been squeezed in the UK by other fast food offers including Subway.
The deal for Burger King is now subject to a 40-day ‘go shop’ period that allows the company to solicit other offers. If completed, the sale would mark a second return to private ownership for Burger King, which was bought out from Diageo in 2002. Investors behind 3G include Brazilian billionaires Marcel Tellas, Carlos Sicupira and Jorge Paul Lemann, the last the third richest man in the world according to Forbes.