Burger King Wants to Take Over Tim Hortons

Burger King Worldwide Inc. confirms its discussions to buy Tim Hortons, paving the way for the creation of a new, publicly traded quick-service restaurant company with its headquarters in Canada.

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

Berkshire Hathaway chairman and CEO Warren Buffett is also reportedly involved the deal. The Wall Street Journal reports Buffett would supply 25 per cent of the Tim Hortons purchase price as part of his partnership with Burger King. His full role in the deal remains unclear.
The Wall Street Journal also noted it wouldn’t be the first time Berkshire Hathaway had been involved with Burger King’s controlling shareholder, 3G Capital Management. Buffet partnered with the investment firm in 2013 to take over H.J. Heinz and Co. for $23 billion. In that deal, Buffet’s company contributed about half the total value.

“3G Capital and its affiliates have a demonstrated track record of managing international expansion of iconic brands around the globe,” the companies said in a joint statement.
“Within this new entity, Tim Hortons and Burger King 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.”

The combined company would become the world’s third-largest quick-service restaurant company, with approximately $22 billion in system sales and more than 18,000 restaurants in 100 countries worldwide.

The companies stressed that any transaction will be structured to preserve the relationships that already have been formed through the years and “deepen the connections each brand has with its guests, franchisees, employees and communities.”

The transaction remains subject to negotiation of definitive agreements. Tim Hortons and Burger King said they do not intend to comment any further on the transaction unless and until a transaction is agreed or discussions are discontinued.