Following IPO, Burger King plans to expand brands in Brazil
With its initial public offering on the street, fast-food chain Burger King is considering using part of the funds raised to expand its brands in Brazil, according to two people familiar with the matter.
Although the priority would be the expansion of Burger King’s own stores, which are growing at a fast pace, the company’s management is evaluating two other possibilities. One of them is to bring to Brazil the fried-chicken chain Popeyes, acquired earlier this year in the US by Restaurant Brands International (RBI), the Burger King controller owned by investor Jorge Paulo Lemann’s 3G Capital and by Warren Buffett.
Such a move would be natural, since RBI itself is a shareholder of Burger King in Brazil, with a 13.6% stake. The view is that Popeyes would have good growth potential in the country since consumption of chicken meals has grown in Brazil, as shown by figures for competitor KFC.
A less obvious option would be to import another brand of the group, the cafeteria chain Tim Hortons. Because of the brand’s name and its menu, in which donuts have a strong presence, it would be difficult to adapt the brand to the Brazilian market. In that case, one possibility would be the acquisition of a Brazilian coffee business, more palatable to the local taste, that could bear the “by Tim Hortons” signature, for example.
In that case, it could be either a cafeteria chain, such as Fran’s Café, or a well-known beverage brand, like Três Corações, two sources said. Fran’s Café and Três Corações were cited to illustrate the business models that could make sense, and not necessarily as targets of ongoing talks.
Source: Valor Econômico