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Wednesday, 31 January, 2001, 23:07 GMT
McDonald's gobbles Pret stake
McDonald's and Pret a Manger logos
McDonald's has bought a 33% stake in Pret a Manger, the UK-based upmarket sandwich shop chain.

The deal is another sign of the US fast-food giant's attempts to diversify its business away from burgers.

McDonald's had long been rumoured to be interested in buying into Pret a Manger - a chain set up in 1986 by two City of London workers who spotted a market for sandwiches with more exotic ingredients.

Pret a Manger now has more than 100 outlets throughout the UK as well as one in New York, which was opened last year.

Expansion plans

Pret said the McDonald's deal would help its plans to expand in New York this year and move into Asia.

"This partnership gives us access to the resources to help take our passion beyond the UK," co-founder Julian Metcalfe said.

"We explored various options to support our ambitious growth plans, including public flotation.

"The McDonald's investment is the best possible outcome, as they will provide so much more than just money. They share our commitment to long term growth, they understand what it takes to build a great retail business and they have unmatched international experience and capability."

Mr Metcalfe said he and co-founder Sinclair Beecham would retain majority ownership and management control, along with chief executive Andrew Rolfe.

BSE concern

McDonald's executive vice-president Claire Babrowski said: "Pret A Manger is a strong brand with a loyal customer following that we believe can be successfully developed around the world."

Earlier this month, McDonald's said its European sales had dropped 10% to $2.2bn (1.5bn) in the last quarter of 2000, partly because of consumer concern over BSE-infected meat.

An investigation by US health regulators into possible violations of animal feed regulations - leading to the quarantining of some Texas cattle - has also helped wipe about 14% off the price of McDonald's shares in the last two weeks.

The corporation's diversification away from burgers has so far also included the purchase of the Aroma cafes last year as well as the Boston Market, Chipotle Mexican Grill and Donatos Pizza chains.

Shares in McDonalds were trading 0.34% lower at $29.35 at the close of business on the New York Stock Exchange.

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