Industry News | July 26, 2001

Burger King and Diageo Move Toward Separation

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Burger King Corporation has confirmed today that in the event of a public offering of Burger King common stock, its parent company Diageo (NYSE: DEO) intends Burger King to have a balance sheet which will support investment grade unsecured debt rated 'BBB' or higher by Standard and Poor's.

Burger King said that in the context of such a separation, Diageo has also agreed to transfer to Burger King Corporation several foreign subsidiaries through which restaurants are operated outside North America. These are Burger King Limited (UK), Burger King BV (Netherlands) and Burger King Australia Pty. Burger King Corporation is a wholly-owned subsidiary of Diageo plc.

Following a recent return of capital to Diageo, Burger King Corporation currently has approximately $1 billion of long-term debt owed to Diageo on its balance sheet.

This announcement does not constitute an offer or sale of securities.