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Burger King parent Restaurant Brands, which is controlled by 3G Capital and Warren Buffett, will add Southern fried chicken to its lineup with a deal unveiled on Tuesday to buy Popeyes for almost $2bn.
Restaurant Brands said that it will pay $79 a share, or $1.8bn, in cash to buy Popeyes, which opened its first shop 45 years ago in New Orleans, Louisiana.
“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,” said Daniel Schwartz, Restaurant Brands’s chief executive.
The group plans to develop Popeyes at a “quicker pace” domestically and abroad in the years to come, Restaurant Brands said.
Brazil-based 3G and Mr Buffett, who have in the past teamed up to acquire Burger King and merge Kraft and Heinz, may sense an opportunity to push into emerging markets where fried chicken has continued to gain popularity.
Indeed, Yum China has 5,224 KFC restaurants. That compares with Popeye’s that had a store count of 2,631 at the start of October, the large bulk of which are in the US.
The Financial Times reported on Monday that Restaurant Brands and Popeyes were in advanced talks over a potential tie-up.
Popeye’s shares surged by almost 20 per cent in pre-market trading to $78.69 a piece.