Olive Garden Parent Company Will Acquire Ruth's Chris Steak House for $715 Million Darden Restaurants, which owns Olive Garden and seven other chains, is approaching the acquisition as a long-term bet on fine dining.
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"Ruth's Chris is a strong and distinctive brand in the fine dining segment with an impressive history of delivering elevated dining experiences to their loyal guests," Rick Cardenas, Darden president and CEO, said in a press release announcing the transaction. "It fits the criteria we have for adding a brand to our portfolio and supports our winning strategy."
The acquisition is part of the company's larger goal to expand its market share in the fine-dining segment.
"As we have seen in our fine-dining brands, consumers with income levels above $150,000 continue to dine out and maintain or increase their spending at casual or fine-dining restaurants," Cardenas said on a call with investors, CNBC reported.
Cardenas also added that the margins for upscale dining are "significantly higher." In Darden's investor presentation about the acquisition, data from Boston Consulting Group shows fine dining is expected to outpace fast-casual restaurants through 2026.
Shares of Ruth's Chris have risen nearly 34% since the announcement.
"We are excited about the opportunity to join the Darden family," Cheryl Henry, president, CEO and chairperson of Ruth's Chris, said in the press release. "This transaction will also provide more opportunities for our team members to develop in their careers as we continue to grow our 57-year-old iconic brand."
The transaction is expected to be completed in June.