Diageo nears $1.5bn Burger King disposal

The drinks giant Diageo is understood to be on the verge of completing the sale of Burger King at a knock-down price of $1.5bn (£950m), with an announcement possible as soon as today.

The disposal of the fast-food chain, which has dragged on since June 2000, ran into trouble last month after Texas Pacific, the US venture-capitalist leading the acquisition, had refused to pay the original $2.26bn sale price struck in the summer.

The final price was conditional on Burger King achieving sales targets up to the end of December. But trading at the chain, which owns more than 11,450 restaurants worldwide, has deteriorated in the past few months as competition with the industry leader, McDonald's, has intensified.

The dip in sales also made it harder for the buying consortium, which also includes Bain Capital and Goldman Sachs Capital Partners, to raise debt funding.

It is not clear whether Diageo, which has been exiting its food businesses to focus on drink brands such as Smirnoff vodka and Johnnie Walker whisky, will be forced to retain an equity stake in Burger King as part of the renegotiated deal.