Tim Hortons May Join Burger King's Empire

MIAMI -- Burger King Worldwide Inc. may be moving north of the border.

Burger King Worldwide and Tim Hortons Inc. confirmed they are in talks to potentially merge and create a global leader in the quick-service restaurant (QSR) business. A new publicly listed company would be headquartered in Canada. Burger King is currently headquartered in Miami.

3G Capital, the majority owner of Burger King, will continue to own the majority of the shares of the new company on a pro-forma basis, with the remainder held by existing Tim Hortons and Burger King shareholders.

Within this new entity, Burger King and Tim Hortons would operate as standalone brands, while benefiting from shared corporate services, best practices, and global scale and reach. A key driver of these discussions is the potential to leverage Burger King's worldwide footprint and experience in global development to accelerate Tim Hortons' growth in international markets, according to a joint statement.

The new company would be the world's third-largest QSR company, with approximately $22 billion in system sales and more than 18,000 restaurants in 100 countries.

Any transaction will be structured to preserve franchisee networks and deepen the connections each brand has with its guests, franchisees, employees and communities.

The transaction remains subject to negotiation of definitive agreements. There can be no assurance that any agreement will be reached or that a transaction will be consummated. Both companies said they do not intend to comment on any potential deal unless and until a transaction is agreed upon or discussions are discontinued.

According to The Associated Press, a shift of Burger King's headquarters to Canada would lessen its U.S. tax bill in a move known as a tax inversion. However, it's not clear exactly how much the tie-up with Tim Horntons would reduce Burger King's tax costs. A recent report by KPMG found that total tax costs in Canada are 46.4 percent lower than in the United States.

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