By Abigail Summerville
NEW YORK (Reuters) – Subway’s late co-founder has left his 50% stake in the sandwich chain to his philanthropic foundation, protecting billions of dollars in proceeds from the company’s potential sale from the reach of the U.S. tax authorities.
The Peter and Carmen Lucia Buck Foundation (PCLB) disclosed this week that the estate of Peter Buck, who co-founded Subway in 1965 and passed away in 2021, will donate his 50% stake in the privately held company to the foundation under the terms of his will.
It is unclear why the donation is happening two years after Buck’s death. It will shield both the estate and the foundation from a big tax bill were Subway to be sold.
Reuters reported in January that Subway was exploring a sale with the help of a financial adviser. The Wall Street Journal reported that a deal could value Subway at as much as $10 billion.
A Subway spokesperson said the company does not comment on ownership structure and business plans.
It is not uncommon for company founders to donate stakes in their companies to their charities, a gesture that serves philanthropy as well as their estate planning. Yvon Chouinard, the billionaire founder of the outdoor apparel brand Patagonia, gave away his company last year to a trust that will use its profit to fight the climate crisis.
Buck, who was a nuclear physicist, and co-founder Fred DeLuca started Subway in 1965 after DeLuca asked Buck for advice on how to pay for his college tuition. The two men eventually started Subway with the help of a $1,000 investment from Buck. DeLuca passed away in 2015.
The Milford, Connecticut-based company, known for its foot-long sandwiches, has more than 37,000 restaurants in over 100 countries.
“This gift will allow the foundation to greatly expand its philanthropic endeavors and impact many more lives, especially our work to create educational opportunities for all students, work Dr. Buck cared so deeply about,” said Carrie Schindele, executive director of the foundation.
(Reporting by Abigail Summerville in New York; Editing by Anirban Sen and Bill Berkrot)