McDonald's acquires minority stake in Pret a Manger - McDonald's Corp - Brief Article

Eurofood, Feb 13, 2001

US fastfood giant McDonald's has agreed to buy a minority stake in UK sandwich bar operator Pret a Manger. Rumours in the UK press had suggested such a move, as McDonald's looks to continually diversify away from burgers, having previously bought the UK-based coffee chain Aroma.

The US-based fastfood giant has taken out a 33% stake in the high-class sandwich retailer, which also sells sandwiches to Buckingham Palace. Both companies have said that the deal will not result in any restructuring. No financial details were disclosed.

Many thought such a combination would be highly unlikely, as McDonald's, with its pre-packaged, pre-delivered ingredients, contrasts Pret a Manger's insistence on freshly prepared sandwiches. Pret a Manger was established in 1986 and operates over 100 sandwich shops in the UK with an annual turnover of [pound] 200m ([euro]316m). In July of last year, Pret a Manger opened its first store in New York, and despite fears that US citizens would not take to the pre-packed sandwich, it has performed well. With McDonald's taking out a stake in the sandwich bar operator, Pret a Manger will be able to accelerate its plans for international growth. Pret a Manger hopes to open further stores in the US, and is also considering expansion in Asia. Commenting on the news, executive vice president at McDonald's, Claire Babrowski said, "Our minority interest [...] gives Pret a Manger the resources to grow its business outside the UK and it provides McDonald's with another opportunity to advance our long-term strategy to seek a greater share of the informal eating out market."