Burger King in talks to acquire Tim Hortons

Burger King Worldwide Inc. confirmed that it is in talks with Tim Hortons Inc. to acquire the 4,546-unit Canadian coffee-and-doughnut chain based in Oakville, Ontario, according to a press release issued Sunday.

Tim Hortons is Canada’s largest publicly traded restaurant chain. The quick-service concept sells premium coffee, hot and cold specialty drinks, fresh baked goods, grilled sandwiches and soups.

If a deal is struck, the combined entity would be the world’s third-largest quick-service restaurant company, with approximately $22 billion in systemwide sales and more than 18,000 units in 100 countries.

According to the release, the deal would be structured as a tax inversion, and Burger King, which operates 13,000 units, would move its headquarters from Miami to Canada. Canada’s federal corporate tax rate is 15 percent, compared with 35 percent in the U.S.

Each brand would continue to operate independently while benefiting from shared corporate services, 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 the release.

With the completion of a deal, Burger King’s largest shareholder, 3G Capital, would hold the majority of shares in the new company on a pro forma basis, while the remainder will be held by existing shareholders of Tim Hortons and Burger King.

A partnership with Burger King would mark Tim Hortons’ second such arrangement with an American burger chain. In 1995, Wendy's acquired Tim Hortons. Activist investors forced Wendy's to spin off the brand in 2006.

Tim Hortons and Burger King said they do not intend to comment further on the potential deal until a transaction is agreed to or discussions are discontinued.