Fast food giant Burger King has signed a deal to acquire coffee chain Tim Hortons for more than $11 billion, creating the world’s third largest fast-food conglomerate and decisively transferring the global headquarters of the iconic American brand into Canadian territory.
The companies announced the deal on Tuesday, framing it as an opportunity to expand the global footprint of the two companies, which have 18,000 restaurants across 100 countries. “The new global company will be based in Canada, the largest market of the combined company,” the companies said in a joint press release, confirming speculation that the merger would enable Burger King to arrange a “tax inversion,” or a merger with a foreign company that enables a U.S. company to reincorporate abroad under a more favorable tax environment. A recent spate of inversions has drawn fire from President Obama and administration officials, who have vowed to crack down on the practice.
Tim Hortons shareholders will receive C$65.50 in cash and 0.8025 common shares of the new company, representing a total value of C$94.05 based on the closing price of Burger King’s stock on Monday, which climbed on news of the impending deal.
Alex Behring, executive chairman of Burger King and managing partner at the private venture firm 3G Capital, will take over as executive chairman of the company, while Marc Caira, president and CEO of Tim Hortons, will be appointed vice-chairman. Burger King CEO Daniel Schwartz will become the new company’s group CEO.