Senator Elizabeth WarrenD-Mass., took to X, the social media site formerly known as Twitter, on Sunday to applaud a federal antitrust investigation focused on the potential acquisition of sandwich giant Subway.
Subway announced in late August that it had reached an agreement to sell the family-owned sandwich chain to private equity firm Roark Capital, in a deal believed to be worth more than $9 billion. The company owns sandwich shops such as Jimmy John’s, Arby’s, McAlister’s Deli and Schlotzky’s.
The private equity firm’s holdings prompted the Federal Trade Commission (FTC) to launch an investigation earlier this month into whether the deal gives the company a monopoly on sandwich shops and other brands in the market. fast food industryaccording to a report from Politico.
“We don’t need another private equity deal that could result in higher food prices for consumers,” Warren wrote on the same company that owns Jimmy John’s and McAlister’s Deli creates a sandwich shop monopoly.
SUBWAY JOINS DUNKIN, JIMMY JOHN’S AND BUFFALO WILD WINGS IN ROARK CAPITAL STABLE
Warren is one of the leading antitrust hawks in the Senate and has regularly asked the FTC to investigate high-profile mergers and acquisitions, such as her ongoing investigation into the merger between Albertsons and Kroger.
Under FTC Chair Lina Khan, the antitrust regulator failed to block any merger plans in court. The agency’s attempt to block Microsoft’s acquisition of Activision was initially rebuffed by the courts and is currently under appeal.
Politico reported that mergers valued at more than $111 million typically receive a 30-day review by the FTC or Justice Department – although these investigations can last longer at the discretion of regulators – and that Subway and Roark unsuccessfully attempted to shorten the investigation by adding an additional 30 days to that initial review period, citing a source familiar with the matter.
SUBWAY AGREES TO SELL TO ROARK CAPITAL, ENDING NEARLY 6 DECADES OF FAMILY OWNERSHIP
THE New York Post noted that a 2021 Subway franchise agreement defined its competitors as quick-service restaurants within a three-mile radius of a Subway location that derive “more than 20% of their total gross revenues from sales of any type of sandwiches on any type of bread, including but not limited to sub and other rolls, sliced bread, pita bread, flatbread and wraps.
The franchise agreement explicitly named Jimmy John’s, McAlister’s Deli and Scholtzky’s as competitors in the sandwich market, the Post reported. This could serve as a focal point for the FTC’s challenge to Subway’s impending sale.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Roark Capital’s portfolio includes several other leading fast food franchise brands, including Baskin-Robbins, Dunkin Brands, Buffalo Wild Wings and Sonic.
The company did not immediately respond to a request for comment.