Private Equity News & Analysis

VTB partners with Burger King for Russian roll-out

VTB Capital has ambitious plans to open several hundred burger restaurants in Russia, having agreed a joint venture with global brand Burger King.

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Private equity group VTB Capital has formed a joint venture with Burger King Europe and Russia-based Burger Rus to develop and expand the Burger King restaurant chain and brand in Russia.

VTB has committed about $100 million to fund the roll-out of several hundred new burger outlets in Russia and the CIS, according to a source close to the situation. The capital investment will be made in several tranches, the source said.

Tim Demchenko, head of private equity and special situations at VTB Capital, said in a statement: “This deal is another milestone in growing VTB Capital’s private equity business, and another example of VTB Capital successfully forming international partnerships to develop attractive market opportunities in Russia and CIS. We plan to continue entering into partnerships with top-tier international companies to take advantage of the strong underlying consumer demand and underpenetrated market in Russia”. 

Yevgeny Senderov, a director in the same group at VTB, added: “We believe the combination of VTB Capital’s wide-ranging experience of investments across a number of industries in Russia with Burger King’s global best practice standards and Burger Rus’ local knowledge will create a winning formula for all shareholders.”

Burger Rus, one of the three participants in the joint venture, already manages 54 Burger King restaurants in Russia.

Alexander Kolobov, Burger Rus managing shareholder, said the growth potential of the Russian ‘quick-service-restaurant’ market was “tremendous”.  “The strength of the Burger King brand and its world-famous products such as the iconic Whopper sandwich is a key driver for further growth in this market,” he added.

The deal follows VTB Capital’s acquisition last month of a minority stake in Zapadnaya Gold Mining, which focuses on the exploration and production of gold in Eastern Siberia. It was VTB’s first foray into the gold-mining industry, and will allow the company to complete construction of its latest mine, as well as pursuing a medium-term project to modernise and develop existing facilities.