Burger King confirms Tim Hortons $11bn whopper deal

Fast food giant will pay about $11 billion to buy Canadian coffee and doughnut chain Tim Hortons

Burger King has confirmed its mega deal to buy Canadian doughnut giant Tim Hortons for about $11 billion, a move that could help give the fast-food company a stronger foothold in the coffee and breakfast market.

The corporate headquarters of the new company will be in Canada, which may also help Burger King lower its taxes.

Such tax inversions have been criticised by President Barack Obama and Congress because they mean a loss of tax revenue for the U.S. government.

Burger King and Tim Hortons said the chains will continue to be run independently and that Burger King will still operate out of Miami. 

The tie-up could help both Burger King and Tim Hortons pose a greater challenge to market leaders such as McDonald's and Starbucks. It also reflects a desire by both companies to expand internationally.

Burger King, which has about 14,000 locations, has been striking deals to open more locations in developing markets.

The company sees plenty of room for growth internationally, given the more than 35,000 locations McDonald's has around the world. Tim Hortons has more than 4,500 locations, mostly in Canada. 

Back in the US, breakfast and coffee have been hot growth areas in the fast-food industry. Between 2007 and 2012, breakfast grew faster than other segment in the restaurant industry at about 5 per cent a year, according to market researcher Technomic. But it has long remained a weak spot for BurgerKing. 

McDonald's led the category with 31 per cent of the market in 2012, while Burger King had just 3 percent to 4 per cent, according to Technomic. 

Under the deal, Burger King Worldwide Inc. will pay $65.50 Canadian ($59.74) 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 $94.05 Canadian ($85.79), based on Burger King's Monday closing stock price. Alternatively, Tim Hortons shareholders may choose either all-cash or all stock in the new company. 

Tim Hortons stock rose more than 10 per cent in Tuesday pre-market trading. Burger King's shares fell slightly.

Additional reporting PA

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you looking to take your ...

SThree: Trainee Recruitment Consultant

£20000 - £40000 per annum + competitive: SThree: Exciting career prospect for ...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Day In a Page

A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935