Restaurant Brands International Inc, the owner of Burger King, is in advanced talks with Popeyes Louisiana Kitchen Inc about a takeover of the fried chicken chain, according to people familiar with the matter.
Negotiations between the companies are ongoing, and a transaction could be announced as early as this week, said the people, who asked not to be identified, as the details are not public.
Talks could still fall apart, they added.
Popeyes has a market value of about US$1.37 billion, while Restaurant Brands is worth US$25 billion.
The companies held talks in summer last year, but were unable to reach an agreement at the time, the people said.
Restaurant Brands renewed its interest in Popeyes late last week and made an offer that was mainly cash, one of the people said, adding that the fried chicken chain then contacted possible counter bidders over the weekend, but no competitive offer materialized.
A spokeswoman for Popeyes declined to comment. A representative for Restaurant Brands did not immediately respond to a request outside of regular business hours.
Restaurant Brands, backed by Brazilian private equity firm 3G Capital, was created in 2014 when Burger King Worldwide Inc bought Tim Hortons Inc and relocated its headquarters to the coffee chain’s home country of Canada.
Warren Buffett’s Berkshire Hathaway Inc was brought in by 3G to provide financing for the deal and still holds a stake in Restaurant Brands.
Popeyes, based in Atlanta, Georgia, can trace its roots back to a single fried chicken shop opened in New Orleans in 1972. It operated and franchised more than 2,600 restaurants in the US and 26 other countries as of Oct. 2 last year, its third-quarter earnings report showed.
Fried chicken is enjoying a renaissance, as people in the US are expected to eat more of it this year than ever before on record — 41.6kg per person, according to the National Chicken Council.
Consumption has surged more than 225 percent since 1960, even as the amount of red meat people eat has declined.
Fast-food restaurants are jumping on the chicken bandwagon as customers clamor for poultry.
Taco Bell, a division of Yum Brands Inc, last month introduced a new chalupa with a shell made out of fried chicken rather than corn or flour.
Shake Shack Inc, famous for its milkshakes and hamburgers, last year started selling a fried chicken sandwich that has already become one of its top sellers.
Reuters on Feb. 13 reported that Restaurant Brands had approached Popeyes about a possible acquisition, citing people familiar with the talks.
The New York Post then reported a day later that Restaurant Brands was interested in buying Popeyes a few months ago, but had walked away from the deal, also citing a person it did not identify.
Deal-making in the restaurant industry picked up last year, with a total of US$7.3 billion of acquisitions announced, compared with US$4.2 billion in 2015, data compiled by Bloomberg showed.
JAB Holding Co, the investment company of Austria’s billionaire Reimann family, agreed to buy Krispy Kreme Doughnuts Inc for US$1.35 billion in May last year, while Heineken NV teamed up with Patron Capital to bid for British pub operator Punch Taverns Plc’s shares in December.
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