Burger King buys Tim Hortons in $11B deal

New global company will boast more than 18,000 restaurants in 100 countries

Miami-based Burger King is buying Canada’s iconic coffee chain Tim Hortons for about US$11-billion in a deal that will allow the two fast food companies to operate as independent brands.

The companies say the transaction will create a new company that will form the world’s third-largest quick service restaurant company.

The new global company will have about $23 billion in sales and more than 18,000 restaurants in 100 countries, allowing both chains to expand globally.

The corporate headquarters will be based in Canada, the largest market of the combined company, and could help Burger King lower its U.S. tax bill.

Oakville, Ont., will remain the global home of Tim Hortons (TSX:THI) and Miami will remain global home of Burger King.
Private equity firm 3G Capital will own about 51 per cent of the new company.

Related stories from Maclean’s and Canadian Business:
Why Tim Hortons feels it needs Burger King
Lessons for Burger King from the Tim Hortons-Wendy’s merger
The activist investor behind the Burger King-Tim Hortons deal
Too hot to handle? Not anymore

Under the terms of the transaction, Burger King will pay C$65.50 in cash and 0.8025 common shares of the new company for each Tim Hortons share. This represents total value per Tim Hortons share of C$94.05 Canadian, based on Burger King’s closing stock price on Monday. Tim Hortons shareholders can choose either all-cash or all stock in the new company.

Alex Behring, executive chairman of Burger King and managing partner at 3G Capital, will lead the new global company as executive chairman and director.

Tim Hortons president and CEO Marc Caira will be appointed vice-chairman and a director, focused on strategy and global business development.

As part of the new company’s commitment to Canada, there are no plans to change the way Tim Hortons works with its franchisees, or its business model and there are no plans to cut staff working at the restaurant level.

“As an independent brand within the new company, this transaction will enable us to move more quickly and efficiently to bring Tim Hortons iconic Canadian brand to a new global customer base,” Caira said in a statement on Tuesday.

“At the same time, our customers, employees, franchisees and fellow Canadians can all rest assured that Tim Hortons will still be Tim Hortons following this transaction, including our core values, employee and franchisee relationships, community support and fresh coffee.”

Tim Hortons shares were up 8.9 per cent to US$82.10 in pre-market trading in New York, while Burger King (NYSE:BKW) ticked 0.5 per cent higher to US$32.60. Both shares surged almost 20 per cent on Monday when reports of the deal first surfaced.




Browse

Burger King buys Tim Hortons in $11B deal

  1. Sad. Should all Canadians be as well?

    I might now boycott Tim Hortons and advise others around me to do the same. I think all Canadians, including myself, should try to the best of their ability to support businesses that are purely Canadian.

      • I don’t know what your problem is and I don’t know how to respond to you

  2. It’s been years and years since I’ve left any money at either
    fine establishment. and don’t foresee it happening in the
    future. But I suppose we should be mildly pleased that someone
    somewhere may be paying a probably-single-digit tax amount into
    Canuck coffers instead of Yank ones. But I think I’ll restrain my
    glee and go back to bed.

  3. 3G Capital of Brazil now owns both of them

  4. the items at burger king are extremely poor food choices and Tim’s coffee is as close to dish water as your likely to come across

Sign in to comment.