The European Commission has cleared the proposed acquisition of US-based fastfood chain Burger King by US investors TPG Advisors, Goldman Sachs and Bain Capital.
The transaction will bring into the same group Domino’s Pizza and Burger King, but the latter will continue to face competition from a wide range of rival food chains, the Commission said in a press release.
Burger King, the target, is active worldwide in the quick service restaurant industry through more than 10,000 franchised or company-owned restaurants and outlets. It is a wholly owned indirect subsidiary of UK-based beverages group Diageo.
The transaction was notified to the Commission on 12 September for regulatory clearance in Europe.
Bain’s relationship with Domino’s came under scrutiny
Of the new parent companies, Bain Capital also has interests in the same sector since it acts as the ultimate general partner of a private equity fund “Bain VI”, which retains an interest in pizza home-delivery company Domino’s.
When taking account of Bain Capital Investors’ interest in Domino’s home-delivery services, the parties have overlapping activities in a number of Member States (Denmark, Germany, Ireland, The Netherlands, Spain and the United Kingdom). However, the parties’ combined share of sales remains below 15% in all cases, the Commission said.
Burger King continues to face competition from Mc Donald’s, Quick, KFC and Pizza Hut, in addition to various national quick-service restaurants. The Commission’s market investigation did not, therefore, identify any competition concerns.
On 19 August 2002, the United States antitrust regulators granted early termination of the waiting period applicable under US merger control rules, thereby clearing the transaction in the United States.
TPG Advisors manages several investment funds, the primary activity of which is to invest in different companies through acquisitions and corporate restructuring.
Goldman Sachs is a global investment banking and securities firm. Goldman Sachs participates in the acquisition through several equity funds for which it is acting as investment manager.
Bain Capital Investors manages several investment funds and invests in a variety of companies. Bain Capital Investors also acts as the ultimate general partner of a private equity fund “Bain VI” which retains an interest in Domino’s. Domino’s is a US company active world wide in the supply of pizza home-delivery services.