Restaurant Brands, CPE form $350M JV to expand BK China

Executive Summary

• Restaurant Brands International (RBI) has entered into a joint venture with CPE to restructure and accelerate the growth of Burger King in China.
• CPE will invest $350 million in new primary capital into the joint venture, taking an approximate 83% ownership stake, while RBI retains a 17% minority stake and a board seat.
• The transaction aims to expand Burger King's footprint in China from roughly 1,250 restaurants to over 4,000 by 2035, supporting RBI's broader strategy of simplifying its business model toward a highly franchised structure.

Key Details

• Transaction Structure: Joint Venture between Restaurant Brands International (RBI) and CPE.
• Investment Amount: CPE is investing $350 million of new primary capital into the joint venture.
• Ownership Split: Upon close, CPE will own approximately 83% of the business; RBI will hold approximately 17% and retain a seat on the board of directors.
• Growth Targets: The joint venture aims to expand the Burger King brand in China from roughly 1,250 restaurants to over 4,000 locations by 2035. This includes doubling the restaurant count within five years.
• Strategic Alignment: The move supports RBI's goal of achieving 5%+ net restaurant growth toward the end of its 2024-2028 outlook period and aligns with RBI's plan to return to a simplified, highly franchised business model.
• Use of Proceeds: The $350 million will support restaurant expansion, marketing, menu innovation, and operations in China.
• Operational Rights: A wholly owned affiliate of Burger King China will sign a 20-year master development agreement, granting exclusive rights to develop the Burger King brand in China.
• Financial Impact: Following the transaction, RBI will begin recognizing royalties from the Burger King China business in its international segment, with a step-up to the business's full historical royalty rate over time.
• Closing Timeline: The transaction is expected to close in the first quarter of 2026, subject to customary regulatory approvals.
• Advisers:
  • RBI Financial Adviser: Morgan Stanley & Co. LLC
  • RBI Legal Advisers: Kirkland & Ellis LLP and Haiwen & Partners
  • CPE Legal Advisers: Morrison & Foerster LLP and JunHe LLP

Notable Quotes

• "China remains one of the most exciting long-term opportunities for Burger King globally. Our recent investments and this joint venture underscore our confidence in the Chinese market," said Joshua Kobza, chief executive officer of Restaurant Brands.
• "Our investment reflects our confidence in Burger King's long-term potential in China. Leveraging our commitment and deep understanding of the Chinese consumer, we aim to bring Burger King's flame-grilled burgers to even more guests across the country," said Mark Mao, managing director of CPE.