Burger King Buys Tim Hortons For $11.4 Billion

Burger King Worldwide announced on Aug. 26 that it would purchase Tim Hortons, the Canadian doughnut and coffee chain, for about $11.4 billion. The deal, which will create the world’s third-largest quick- service restaurant company, is the biggest-ever acquisition of a restaurant chain.

The merged chains create a strong competitor to McDonald’s and Yum! Brands; their combined operations will have 18,000 restaurants in 100 countries and about $23 billion in annual revenue.

As part of the transaction, the American burger chain will move its corporate headquarters from Miami to Canada. While the move—and the deal—might be seen as a “corporate inversion,” in which an American company switches its national citizenship to lower its tax bill, BK can cite legal reasons for the move. In Canada, mergers such as this one are governed by the Investment Canada Act, which allows the national government to block a merger if it is deemed to not be in the best interests of the country. Tim Hortons is one of the country’s iconic restaurants, and such a merger structure would allow it to remain Canadian. (The chain was owned previously by Wendy’s and was spun off in 2006.)

However, the two companies emphasized that each will continue to be run from its current home base, Oakville, Ontario, for Tim Hortons, and Miami for BK. Neither is altering its franchisee agreements or business models. No changes have been announced to either corporate structure.

Tim Hortons, now celebrating its 50th anniversary, has 3,630 outlets in Canada and nearly 1,000 in the U.S. Burger King operates more than 13,000 locations, almost all of which are run by franchisees.

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