Burger King Announces $4B Acquisition Deal

September 3, 2010 24170 Comments2010-09-03+10%3A33%3A52Ben+Nash

Ayinde O. Chase – AHN News Editor

Miami, FL, United States (AHN) – No. 2 hamburger retailer Burger King announced Thursday that it will be sold to 3G Capital in a deal worth $4 billion. The news brought shares of the company to an 18-month high.

According to a company statement, “Under the terms of the agreement, which has been unanimously approved by the company’s board of directors, stockholders will receive $24 in cash per share for all outstanding shares of the company’s common stock, representing a 46 percent premium to the company’s unaffected share price before recent market rumors. 3G Capital has obtained committed financing to purchase all outstanding shares and refinance existing indebtedness. The transaction is expected to close in the fourth quarter of this calendar year.”

Terms of the deal provide that Burger King’s Chairman and CEO John Chidsey will become co-chairman of the board with 3G Managing Partner Alex Behring the other co-chairman.

3G is slated to begin the acquisition process of the outstanding shares by Sept. 17.

The Miami-headquartered Burger King, which is only surpassed in sales by McDonalds, is worth about $2.3 billion and boasts more than 12,000 restaurants in more than 75 countries.

The fast food chain went public four years ago, and since then has been hit with global recession and high unemployment, which dramatically reduced consumer spending. Government austerity programs in several European countries also had an effect on same-restaurant sales.

In previous reports, analysts said the retailer’s highest demographic of customers are working males.

Last week the company said its fourth-quarter net income declined to $49 million or 36 cents a share from $58.9 million or 43 cents a share in the same quarter last year. Worldwide revenues slipped 1 percent to $623 million, impacted by lower comparable sales and currency translation.

Before going public in 2006 TPG, Bain Capital and Goldman Sachs owned the company after buying it from Diageo in 2002 for about $1.5 billion.