Restaurant Brands International, owner of the Burger King and Tim Hortons fast-food chains, is nearing a deal to acquire Popeyes Louisiana Kitchen, people familiar with the matter said on Monday.
The deal, which will likely value Popeyes at more than $1.7 billion, is a bet by Oakville, Ontario-based Restaurant Brands that it can use its international reach to introduce Popeyes’ Louisiana-style fried chicken and buttermilk biscuits to more diners globally.
It also represents a small consolation prize for Restaurant Brands shareholder 3G Capital, which lost a $143 billion bid this week to merge its biggest holding, food conglomerate Kraft Heinz, with consumer products firm Unilever.
A deal could be announced as early as this week, the people said, asking not to be identified because the negotiations are confidential. Restaurant Brands did not respond immediately to a request for comment, while Popeyes decline to comment.
Popeyes (AFCE), whose fans include pop singer Beyoncé, began 45 years ago as a Southern-fried “Chicken on the Run” restaurant in a New Orleans suburb. It has since expanded to more than 2,000 restaurants, of which 1,600 are in the United States.
The company has benefited from strong customer loyalty, as well as from a restaurant refurbishment program.
Chicken accounts for about 10% of the fast-food industry, according to data service IBISWorld, and Popeyes’ market share is growing. The largest brands in the sector include privately held Chick-fil-A and Yum! Brands’ KFC.
Private equity firm 3G Capital, which is controlled by Brazilian billionaire Jorge Paulo Lemann, owns about 43% of the voting shares in Restaurant Brands (RTBRF). 3G Capital has made a name by acquiring major U.S. consumer companies including Kraft Heinz.
Restaurant Brands was formed in 2014, when 3G Capital-backed Burger King acquired Canadian coffee and doughnut chain Tim Hortons Inc for $11 billion.
3G Capital’s long-time partner, Warren Buffett’s Berkshire Hathaway, committed $3 billion of preferred equity to finance that deal.