From the internet,we know the news that Burger King Worldwide Inc agreed to buy coffee and doughnut chain Tim Hortons Inc.for about $11 billion,confirming plans to move the iconic american brand north of the border under a tax inversion deal.
The relocation of a such a high-profile American brand is likely to elevate the debate over tax inversions at a critical time as US lawmakers look to stem the growing wave of company departures.
Adding a twist to the deal, legendary investor Warren Buffett's Berkshire Hathaway inc is providing $3 billion in preferred equity finacing throwing him into the center of the debate over US tax policy.
The deal would create the world's third largest quick-service restaurant company,with about $23 billion in system sales and more than 18,000 restaurants in 100 countries. The new global company will be based in Canada, though each brand will be managed independently after the deal's completion,the companies said.
By bring together our two iconic companies under common owership, we are creating a global powerhouse, executive chairman of Burger King and managing partner of 3G Capital. Tim Hortons shareholders will receive C$65.50 in cash and 0.8025 shares of the new company for each share, valuing the restaurant company's stock on Monday.As an alternative, shareholders will be able to choose to receive either C$88.50 in cash or 3.0879 shares of the new company.
The acquisition of Tim Hortons, which is Canada's largest quick-service chain and has a market capitalization of about $10 billion, would have to win Canadian government approval.That means Burger King, which is controlled by Capital management, would have to show that the deal provides a so-called net benefit to Canada.
In an inversion, a US firm relocates-- usually through a merger with a smaller company to a country where tax tates and rules are perceived to be friendlier, but it typically continues to be managed from the US.----reprint
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