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EDITIONS
Friday, 13 December, 2002, 09:17 GMT
Burger King sold for $1.5bn
Burger King restaurant interior
Poor sales cut Burger King's price
The drinks firm Diageo has finally sold its Burger King fast-food chain, but for a much lower price than originally sought.

The chain has been bought for $1.5bn (950m) by a consortium of US venture capitalist firms.

The price is about a third less than the amount Diageo had previously agreed with the consortium.

But the original agreement was changed after the US buyers demanded a review of the price following poor trading at the burger chain.

New focus

Burger King has more than 11,000 outlets around the world, with three-quarters of them in the US.

Diageo has been keen to sell the chain as part of its strategy of concentrating on its drinks business.

The firm is the world's largest drinks group, and includes brands such as Baileys Irish Cream, Smirnoff vodka and Johnnie Walker whisky.

The consortium led by US firm Texas Pacific originally offered $2.26bn (1.4bn) for Burger King.

But the offer was subject to Burger King meeting certain performance targets, and poor trading at the chain led to the original deal being scrapped.

'Difficult market'

Under the terms of the new deal, Diageo will provide some of the debt financing for the sale.

"We are pleased that we have been able to reach this agreement despite a difficult market and at a time of tough trading conditions for the quick service restaurant sector," said Diageo chief executive Paul Walsh.

"We continued to review our options but concluded that this transaction with this buying group was the most certain route to achieving separation."

In early trade on Friday, Diageo shares were down 11.5 pence at 653.5p.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Ian Pollock
"Profits have been falling at Burger King"
Paul Walsh, CEO Diageo
"Burger King is better separated from core Diageo"
See also:

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