By Barry Eitel
SAN FRANCISCO (AA) – The parent company of Burger King announced Tuesday it would buy fried chicken chain Popeyes Louisiana Kitchen for $1.8 billion.
Popeyes, with 2,600 locations worldwide, will be owned by Restaurant Brands International (RBI) once the deal passes regulatory approval. RBI was formed in 2014 when iconic American hamburger company Burger King acquired Canadian coffee shop chain Tim Hortons for $12.5 billion. The merger was a tax inversion scheme to take advantage of Canada’s lower corporate taxes; RBI is headquartered in Oakville, Canada.
Popeyes is the first chain RBI has acquired since its founding.
"Popeyes is a powerful brand with a rich Louisiana heritage that resonates with guests around the world,” RBI CEO Daniel Schwartz said in a statement. “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. 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. We look forward to taking an already very strong brand and accelerating its pace of growth and opening new restaurants in the U.S. and around the world."
Founded in New Orleans in 1972, Popeyes has doubled its number of locations since 2008 and about 97 percent of its restaurants are franchises. RBI contends that Popeyes will be managed independently in the United States.
"I am proud of the superior results the Popeyes team has delivered in recent years; they have served all stakeholders well,” Popeyes CEO Cheryl Bachelder said in a statement. “As Popeyes enters its 45th year, its success reflects the amazing brand entrusted to us by founder Al Copeland, Sr. and the unique high trust partnership that we enjoy with our franchise owners.”
Shares of RBI closed Tuesday at $57.60, almost a 7 percent increase from the previous day.
Popeyes stock rose 19 percent amid the news and closed at $78.73. According the to the terms of the acquisition, RBI will pay $79 per share.