Could the Burger King Merger With Tim Hortons’ Lead To More Acquisitions?

Burger King Worldwide is no more. What’s the plan now for them?

ValueWalk is reporting now that with the merger between Burger King and Tim Hortons is complete, and they both now reside under the Restaurant Brands International title, what is next? Do two kinds of restaurants under one name constitute a brand? 3G Capital, a Brazilian-based corporation, is primarily responsible for the financing that helped the merger to the finish. Now, 3G could be looking for the next big acquisition for public franchising.

Jorge Paulo Lemann, founder of 3G capital, is utilizing his experience as a former tennis professional in the business world. Using serve-and-volley tactics, waiting for his next conquest to expose a need, then capitalizing on that error to broker a deal. He’s done it with the Burger King-Tim Hortons merger, but is that the end of it? Will 3G use its well-known aggressive corporate building structure style to help Restaurant Brands grow and expand?

Lemann employed the same tactics acquiring Tim Hortons in 2014 that 3G used to acquire Burger King in 2012. Once acquired, the management structure was streamlined, and the stricter management structure led to quicker profitability.

Now, with Burger King utilizing tax inversion by moving its corporate headquarters to Restaurant Brands International in Ontario, Canada, Lemann is looking towards its next acquisition. Campbell Soups has been bandied about for a low-level opportunity, but Restaurant Brands may want to stay within the restaurant industry.

The Fool is reporting that Restaurant Brands International is possibly looking into getting into the pizza delivery business, among others. Little Caesar’s is a privately held company, but there are possible opportunities in the public domain. Domino’s and Papa John’s are two possibilities that may interest Restaurant Brands. Of the two, Papa John’s has approximately half the stores Domino’s has, and about 84 percent fewer stores internationally. Global pizza delivery is still in its infancy, so acquiring Papa John’s now would definitely allow Restaurant Brands to improve its global presence from the ground level.

Restaurant Brands could also go into the fast-casual category, perhaps picking up Chipotle as a subsidiary. But, Chipotle’s reluctance to franchise may make it less attractive. Qdoba Grill allows franchising, but is already owned by Jack In The Box. While acquiring Qdoba Grill is attractive, having two competing hamburger restaurants may not be.

3G Capital has deftly taken Burger King and Tim Hortons from fair-running national restaurants to the cusp of international prominence. Though hard to determine what course they will take, it is certain that they will look to move up, and very soon.

[Image courtesy of Concerned Tim Hortons Franchisees]

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