Restaurant Brands International Announces Plan for Burger King® in China

Rhea-AI Summary

Restaurant Brands International (QSR) has acquired all equity interests in Burger King China from TFI Asia Holdings BV and Pangaea Two Acquisition Holdings XXIII, (Cartesian) for approximately $158 million in an all-cash transaction. Following this acquisition, RBI now owns nearly 100% of the business.

The company plans to identify a new local operating partner to inject primary capital and become the controlling shareholder, aligning with RBI's strategy of partnering with experienced local operators while maintaining a primarily franchised business. Under TFI's partnership, Burger King expanded from approximately 60 restaurants in 2012 to 1,500 today in China. TFI will continue its operations in Turkey as one of RBI's largest business partners, while Cartesian remains a partner in the Tim Hortons business in China.

Positive

• Acquisition gives RBI nearly 100% control of Burger King China operations
• Significant market presence with 1,500 restaurants in China
• Strategic expansion from 60 to 1,500 restaurants since 2012 demonstrates strong growth

Negative

• $158M cash expenditure impacts company's liquidity
• Temporary lack of local operating partner could affect near-term operations
• Need to find new partner creates uncertainty in Chinese market operations

Insights

Investment Strategist

This strategic acquisition represents a significant pivot in RBI's China strategy, with several key implications for investors:

The $158 million transaction value for a network of 1,500 locations suggests a relatively modest per-store valuation, indicating potential operational inefficiencies or underperformance that RBI aims to address through restructuring. This presents both an opportunity and a risk - while the low valuation might offer upside potential, it also signals possible challenges in the current operation model.

The decision to maintain majority ownership temporarily while seeking a new operating partner reveals three critical strategic elements:

• RBI is taking direct control to potentially implement operational improvements before bringing in a new partner, which could enhance the value proposition for future negotiations.
• The company is prioritizing partner selection over speed, suggesting a focus on long-term value creation rather than short-term gains.
• The retention of the partnership with Cartesian for Tim Hortons China operations indicates RBI's ability to maintain complex stakeholder relationships while restructuring individual brand operations.

The growth from 60 to 1,500 restaurants demonstrates the market's significant expansion potential, but the timing of this restructuring suggests RBI sees opportunity for operational optimization. This aligns with broader industry trends where global QSR players are recalibrating their China strategies amid evolving consumer preferences and intensifying competition.

For investors, this move signals RBI's commitment to value creation in its second-largest market while maintaining its asset-light, primarily franchised business model. The temporary increase in operational control, while seeking a new partner, suggests potential near-term margin pressure but positions the company for improved long-term returns through better partner alignment and operational efficiency.

RBI acquires partners' equity stakes and will identify a new local operating partner
Transaction shows commitment to drive long-term growth in China

TORONTO, Feb. 18, 2025 /PRNewswire/ -- Restaurant Brands International Inc. (NYSE: QSR) (TSX: QSR) (TSX: QSP) ("RBI", "Company") announced today that a subsidiary of RBI has acquired from TFI Asia Holdings BV ("TFI") and Pangaea Two Acquisition Holdings XXIII, Ltd ("Cartesian") all their equity interests in Burger King China for approximately $158M in an all-cash transaction.

As a result, RBI now owns nearly 100% of the business and will engage advisors to assist the company to identify a new local partner to inject primary capital into the business and become the controlling shareholder. This aligns with RBI's long-term strategy of partnering with experienced local operators while maintaining a primarily franchised business.

TFI has been a valued partner in Burger King's expansion in China, helping the brand grow from ~60 restaurants in 2012 to ~1,500 today and will continue expanding its operations in Turkey as one of RBI's largest business partners worldwide.

Cartesian has also played an important role supporting Burger King's development in the market, and RBI continues to be a partner with Cartesian in growing the Tim Hortons business in China.

"We are thankful for TFI's and Cartesian's partnership over the years and their role in expanding the brand in China," said Rafael Odorizzi, President of Asia Pacific for RBI. "This transaction marks the beginning of a new chapter for Burger King in China and reinforces our commitment to long-term growth in the region as we identify a new local operating partner. We are committed to offering our guests high quality food and exceptional experiences in welcoming restaurants across China."

About Restaurant Brands International Inc.
Restaurant Brands International Inc. is one of the world's largest quick service restaurant companies with nearly $45 billion in annual system-wide sales and over 32,000 restaurants in more than 120 countries and territories. RBI owns four of the world's most prominent and iconic quick service restaurant brands – TIM HORTONS®, BURGER KING®, POPEYES®, and FIREHOUSE SUBS®. These independently operated brands have been serving their respective guests, franchisees and communities for decades. Through its Restaurant Brands for Good framework, RBI is improving sustainable outcomes related to its food, the planet, and people and communities.

Forward-Looking Statements
This press release includes forward-looking statements, which are often identified by the words "may," "might," "believes," "thinks," "anticipates," "plans," "expects," "intends" or similar expressions and include statements related to expectations regarding growth of the Burger King business in China, the Burger King and Popeyes businesses in Turkey, and the Tim Hortons business in China, and the ability to identify a new local partner to become the controlling shareholder in the Burger King business in China. These forward-looking statements may be affected by risks and uncertainties in the business of RBI, Burger King in China, Burger King and Popeyes in Turkey and Tim Hortons in China and market conditions, and include the following: risks related to competition, macro-economic factors and general risks of doing business in China and Turkey, the effectiveness of marketing, advertising and digital programs, ability to successfully implement growth strategies, ability to identify and lease sites that meet brand criteria, unforeseen events, fluctuations in interest and currency exchange rates, tariffs, changes in laws and regulations, and geopolitical conflicts. This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in filings made by RBI with the U.S. Securities and Exchange Commission and the Canadian securities regulators, including RBI's annual report on Form 10-K for the year ended December 31, 2023. RBI cautions readers that certain important factors may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made herein. RBI does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Contacts
RBI Investors: investor@rbi.com
RBI Media: media@rbi.com

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SOURCE Restaurant Brands International Inc.

FAQ

How much did RBI pay for Burger King China acquisition in 2025?

RBI paid approximately $158 million in an all-cash transaction to acquire the equity interests in Burger King China from TFI and Cartesian.

How many Burger King restaurants are currently operating in China under QSR?

There are approximately 1,500 Burger King restaurants operating in China, up from 60 restaurants in 2012.

What is RBI's plan for Burger King China after the 2025 acquisition?

RBI plans to identify a new local operating partner to inject primary capital into the business and become the controlling shareholder.

How has Burger King's presence in China grown since 2012?

Burger King has grown from approximately 60 restaurants in 2012 to about 1,500 restaurants in 2025 under TFI's partnership.

Will QSR maintain full ownership of Burger King China long-term?

No, QSR plans to identify a new local operating partner who will become the controlling shareholder, aligning with their franchising strategy.