Triarc Cos., the owner of the Arby’s fast food chain, has agreed to buy competitor Wendy’s International for $2.3 billion.
Under the deal, Triarc plans to change its corporate name to include Wendy’s, but Arby’s and Wendy’s would operate as autonomous brand business units, the companies said. The new company plans to expand and grow through future acquisitions and new unit development. Its core focus will be breakfast meals.
Wendy’s had rejected at least two buyout offers, according to news reports.
“Working together with the Wendy’s team, we expect to improve margins significantly at Wendy’s company-owned stores,” Smith said. “We also expect to drive significant synergies and improve efficiency, resulting in substantial annual savings for our combined organization.”
The deal, subject to regulatory approvals, is expected to close in the second half of this year.
The buyout comes nearly a year after Wendy’s board of directors formed a committee to investigate its options for the company, including a sale
(Promo Xtra, April 27, 2007).
Wendy’s yesterday released its first-quarter adjusted earnings. Revenue totaled $582.2 million for the last three months, down 1.4% from $590.2 million a year ago.
The merger has no impact on the company’s ongoing search for a permanent chief marketing officer. In February, Paul Kershisnik was named as interim CMO and is a candidate for the position. Kershisnik, who joined Wendy’s in March 2007 as senior vice president of marketing strategy and innovation, oversees research and development, strategic insights, operations innovation, brand marketing, field marketing, media, diversity marketing and creative/advertising production.
Industry analysts view the change in ownership as a positive development. Competitor Burger King was acquired by in 2006 by a trio of investment firms, including TPG Capital L.P., Bain Capital and Goldman Sachs, and has since made a strong comeback, said Scott Hume, editor-in-chief of Restaurants and Institutions magazine. Though Wendy’s still has a way to go. Perhaps Triarc’s biggest hurdle is communicating Wendy’s messaging.
“Wendy’s needs a good shot in the arm as far as branding,” Hume said. “It needs to decide what it strengths are and push harder.”
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