Triarc Companies, Inc., the franchisor of the Arby’s restaurant system, and Wendy’s International, Inc. announced today they have signed a definitive merger agreement, which has been approved by the boards of directors of both companies. The deal is for an all-stock transaction in which Wendy’s shareholders will receive shares of Triarc stock for each share of Wendy’s stock they own.
The transaction will bring together Arby’s and Wendy’s and create the third largest quick service restaurant company in the nation. The combined systems will have approximately 10,000 restaurant units and annual sales of approximately $12.5 billion.
Under the agreement, Triarc’s shareholders still have to approve a charter amendment that will allow the conversion of stocks.
Arby’s and Wendy’s will operate as autonomous brand business units and retain their separate headquarters in Atlanta, GA, and Dublin, OH, respectively.
The new company expects to pursue expansion, primarily focused on breakfast, global expansion for both brands, and growth through future acquisitions and new development. A consolidated support center to be based in Atlanta will oversee all public company responsibilities and other central service functions. As a result, substantial corporate overhead savings are expected.
Triarc will change its corporate name post-merger to include the name “Wendy’s”; Triarc’s Board of Directors will also be reconstituted and will have 12 members, including two directors nominated by Wendy’s. Roland Smith, 53, Triarc’s Chief Executive Officer, will continue in that role for the combined company and also will become Chief Executive Officer of the Wendy’s brand.
“We believe the combination of Arby’s and Wendy’s will create a powerful new restaurant company and a ‘must own’ restaurant stock with significant upside potential as we execute on the many opportunities we see to expand and improve these two very valuable brands,” said Smith. “Working together with the Wendy’s team, we expect to improve margins significantly at Wendy’s company-owned stores.”
Read more: Wendy’s founder Dave Thomas’ daughter, Pam Thomas Farber, reportedly said the family was devastated by the news. For more on that, click here.
The transaction is subject to regulatory approvals and customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction also requires the approval of Triarc and Wendy’s shareholders. The transaction is expected to close in the second half of 2008.
Wendy’s International, Inc. has more than 6,600 Wendy’s restaurants in the United States, Canada and international markets.
Triarc is a holding company and, through its subsidiaries, is the franchisor of the Arby’s restaurant system which is comprised of approximately 3,700 restaurants, of which, as of December 30, 2007, 1,106 were owned and operated by its subsidiaries.