CHICAGO - Burger King's new ruler could help its empire expand.
Burger King Holdings Inc. sealed a deal Thursday to sell itself for $3.26 billion to 3G Capital, an investment firm with strong ties to Latin America. The fast-food chain's chairman and CEO, John Chidsey, said the deal will help it expand more rapidly overseas.
Chidsey, who will become co-chairman of the company after the tender offer is complete, said the $24-per-share deal also brings 3G Capital's experience and contacts abroad. "Hopefully they'll be able to even provide more of an accelerant to the fire," he told the Associated Press.
More than a third of Burger King's locations are outside the United States. That's growing as the company shifts its expansion focus to other countries. In the past year, 90 percent of its new locations were built abroad.
Chidsey declined to comment on specific strategies, deferring to 3G Capital. He also declined to comment on potential efforts to cut costs, including possible layoffs. Messages left for 3G Capital weren't returned but the company told franchisees and investors in a letter on its website that it plans to invest in the brand and highlighted opportunities in Asia and Latin America. Burger King's headquarters will remain in Miami.
Burger King has more than 12,100 locations around the world and perennially lags its far larger competitor McDonald's Corp. It struggled to keep up with its rival during the economy's roller coaster of the past two years.
Its biggest problem: high unemployment among its most important, but notoriously fickle, group of customers -- young men between 18 and 34, whom it has targeted with big burgers like the 930-calorie BK Quad Stacker and edgy ads featuring a creepy King character.
The company also needs to work with its large group of franchise owners to brighten locations, UBS analyst David Palmer said. That will take time and money.
