MOSCOW, August 25 (RIA Novosti) - Burger King representatives confirmed merger discussions with Canadian coffee and doughnut chain Tim Hortons, a deal that would create a new fast food company with a market capitalization of about $18 billion, Reuters reported on Monday.
According to the plans, the new chain of quick service restaurants will be based in Canada, where corporate taxes are lower than the United States.
During the last few months, there have been several attempts by US companies to create tax inversion deals. These cases have been criticized by US President Barack Obama, who said that companies seeking such deals had a “herd mentality.”
At the same time, some US organizations have taken the opposite approach and are instead avoiding adopting tax-cutting measures, leveraging on the image of an all-American consumer enterprise.
According to Reuters, the majority shareowner of Burger King, 3G Capital, will continue to own a majority of the newly incorporated entity, with the rest of the shares to be held by Burger King and Tim Hortons.
Tim Hortons and Burger King are set to operate as standalone brands within the new company, while benefiting from shared corporate services.
Burger King’s global image is expected to facilitate Tim Horton’s growth in international markets.
The companies’ representatives refused to reveal further details on the deal until a transaction is agreed, or discussions are discontinued.
Burger King is a global chain of fast food restaurants with a market capitalization of about $9.55 billion founded in 1954 and headquartered in Miami, Florida. It has more than 13,000 outlets in nearly 90 countries.
Canada-based Tim Hortons operates 3,500 restaurants nationwide and more than 850 in the United States. Its US market capitalization stands at about $8.4 billion.