Burger King Worldwide Inc. has announced it has reached a deal to buy Tim Hortons Inc. The acquisition was unanimously approved by the boards of directors of both companies, which would put the headquarters of the world’s third-largest fast food company in Canada.
im Hortons shareholders are to receive $65.50 in cash and 0.8025 common shares of the new company per Tim Hortons share as stipulated by terms of the $12.5-billion deal. In pre-market trading on Tuesday morning, Tim Hortons shares jumped more than 10% after surging to a new all-time high on Monday after the companies confirmed they were in takeover talks. According to the release announcing the agreement, the combined company would have US$23-billion in sales and more than 18,000 restaurants in 100 countries.
Burger King CEO Daniel Schwartz will become CEO of the new company. Tim Hortons President and CEO Marc Caira’s proposed new position is vice-chairman and director. Alex Behring, who is currently Burger King’s executive chairman and managing partner at 3G Capital, Would become executive chairman and director and 3G would own about 51% of the new company.
“Canada has moved to a highly competitive tax regime,” Canadian Finance Minister Joe Oliver told reporters after a meeting with technology executives. “We believe this has been a constructive move that is designed to retain capital in this country, which results in more business expansion and more employment.”