3G Capital names Latin American railroad executive as new Burger King CEO, pending takeoverBy AP
Thursday, September 9, 2010
Burger King buyer names rail exec as future CEO
NEW YORK — Burger King’s soon-to-be new owners have named a former Latin American railroad executive to be CEO of the fast-food chain after the $3.26 billion deal goes through.
The appointment of Bernardo Hees by 3G Capital is a signal that the investment firm is serious about expanding the Burger King brand further into Latin America and elsewhere abroad.
Hees will replace John Chidsey, who had been CEO since 2006 of the fast-food chain, which has struggled in the economic downturn to keep people dining at its restaurants. Chidsey will become co-chairman after the deal closes.
Hees was most recently CEO of America Latina Logistica, Latin America’s largest railroad company, in which 3G Capital owns a stake of about 6 percent. He became a partner at 3G Capital in July.
Ties between the companies are deep. Alexandre Behring, managing partner at 3G Capital, co-founded the railroad company in 1997 and served as its CEO from 1998 to 2004. He is set to become co-chairman as well after the deal closes.
“Bernardo is an experienced executive with an impressive track record of enhancing performance at America Latina Logistica, where he managed a team that drove strong gains in both revenues and profitability,” Behring said in a statement. “I know he will be an excellent steward of the Burger King brand.”
3G Capital, which made its offer last week, is expected to begin its effort to acquire the outstanding shares of Miami-based Burger King for $24 per share by Sept. 17.
The company has struggled in the weak economy as its main customers — men between 18 and 34 — suffer high rates of unemployment. It perenially is number 2 to its far larger competitor McDonald’s Corp., which has more locations abroad.
3G has not said much about its plans for the company, but told franchisees and investors in a letter on its website posted last week that it plans to invest in the brand and highlighted opportunities in Asia and Latin America.
The investment firm has strong ties to Latin America, including ties to Jorge Paulo Lemann, a 71-year-old Brazilian billionaire.
It also has a focus on consumer-oriented businesses. The firm’s other controlling or partial stakes include brewer Anheuser-Busch InBev and Lojas Americanas, a major Brazilian retailer and travel agency.
Burger King’s new owners are looking at changing the company’s strategy because it has not been executing well in the past few years, said Citigroup analyst Greg Badishkanian, and that means expanding abroad. So it makes sense that a new CEO would have such experience abroad.
“I think international is going to be very important for them,” he said.
Hees began at America Latina Logistica in 1998 as a logistics analyst. He held a variety of executive positions there and had served as CEO since 2005.
On Aug. 31, just days before the Burger King deal was announced, the Brazilian railroad company announced that Hees would step down as CEO but remain on the board of directors. The company named chief operating officer Paulo Basilio to replace him Sept. 10.
Burger King shares were unchanged at $23.67 in afternoon trading Thursday.
Tags: Hispanics, Latin America And Caribbean, New York, North America, Personnel, United States