VTB Capital, the investment arm of Russia’s second biggest lender, has established a joint venture with Burger King and the fast food giant’s Russian franchisee Burger Rus to develop and expand the restaurant’s chain and brand presence in the country.
The new company has signed a long-term master franchise and development agreement with Burger King Europe, as well as obtaining exclusive rights to grow the group’s franchise in Russia.
Although financial terms of the deal were not disclosed, a source close to the situation said the transaction is valued at more than $100m.
The joint venture is looking to capitalise on the fast-growing and underpenetrated quick-service restaurant (QSR) market in Russia, with the intention of opening several hundred Burger King restaurants in Russia over the next few years.
“The growth potential of the Russian QSR market is tremendous as we have witnessed by the success of the 54 Burger King restaurants that we already operate in the country,” said Burger Rus managing shareholder Alexander Kolobov.
“The strength of the Burger King brand and its world-famous products such as the iconic Whopper sandwich is a key driver for further growth in this market.”
3G Capital, the Brazilian private equity firm that owns Burger King, is also in the process of selling almost a third of the company less than two years after taking it private.
The firm, which spent $3.26bn acquiring the chain from private equity firms TPG, Bain Capital and Goldman Sachs, now plans to sell a 29 per cent stake to Justice Holdings for $1.4bn.
London-listed Justice will merge with Burger King, with 3G keeping a 71 per cent holding in the new company, in a deal that values the business at around $8bn including debt – double the price 3G paid in October 2010.
Burger King has seen a recent increase in profits amid a change in tactics designed to make it more competitive against industry giant McDonald’s and fellow burger chain Wendy’s.
The company is in the process of adding healthy options such as salads and smoothies to its menu to broaden its appeal to customers.
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