Burger King parent company Restaurant Brands International (RBI), announced plans to acquire Popeyes Louisiana Kitchen, the southern fried chicken chain for $1.8bn.
Ontario-based RBI was formed in 2014 when Burger King merged with the Canadian donut shop Tim Hortons.
It is majority-owned by 3G Capital, the Brazilian private equity firm, a big investor in Kraft Heinz, the US food giant which last week failed to merge with Unilever, the Anglo-Dutch consumer goods company.
RBI will pay $79 a share to buy Popeyes, which opened its first shop 45 years ago in New Orleans.
The deal will be financed with cash and a loan from JPMorgan and Wells Fargo.
“With this transaction, RBI is adding a brand that has a distinctive position within a compelling segment and strong U.S. and international prospects for growth,” said Daniel Schwartz, RBI’s chief executive.
Popeyes, with 2,631 shops worldwide, boasts celebrity fans including the popstar Beyonce.
Fun Fact: Beyoncé has a Popeyes lifetime membership card, but is too embarrassed to use it. pic.twitter.com/5cyXkMjTVI
— Yoncé (@BestOfYonce) June 8, 2015
Popeye’s shares surged by almost 20 percent in pre-market trading to $78.69 a piece.
“RBI has observed our success and seen the opportunity for exceptional future unit growth in the U.S. and around the world. The result is a transaction that delivers immediate and certain value to the Popeyes shareholders,” said Cheryl Bachelder, chief cxecutive of Popeyes in a statement.
The transaction is expected to close by early April 2017.