Texas Pacific finally wins Burger King in US$2.2bn deal - Company News - Texas Pacific Group, Diageo sale of Burger King - Brief Article

Eurofood, August 1, 2002

UK-based drinks giant Diageo has agreed to the sale of Burger King Corporation to a group composed of Texas Pacific Group (TPG), Bain Capital and Goldman Sachs Capital Partners.

The deal is worth some US$2.2bn (2.25bn [euro]) in cash on a debt free basis, and a portion of the purchase price is dependent upon Burger King satisfying certain performance targets in its financial year ended 30 June 2002. The transaction is expected to close in the fourth quarter of this calendar year.

Diageo said it anticipates the cash proceeds from the Burger King sale will be made available for reinvestment in its core drinks business and for return to shareholders.

In March 2002 Diageo commenced a review of options for the separation of Burger King as the final step in exiting the food industry and concentrating on premium drinks. The drinks giant successfully offloaded its Pillsbury baking unit, albeit after a lengthy investigation, to US firm General Mills.

Announcing the agreement, Paul Walsh, chief executive officer of Diageo, said, "The announcement represents an important milestone in Diageo's journey. In the last two years since we announced our intent to exit food, we have brought together our global spirits, wine and beer businesses, including exciting new assets from Seagram. Now we will focus all our management skills to deliver sustainable top and bottom line growth and create still greater value for our shareholders.