Oakville, Ontario and Miami – The combined company will have more than 18,000 restaurants in 100 countries, and approximately $23 billion in annual sales.
The new company formed from the merger of Burger King and Tim Hortons will be based in Canada, where the majority of Tim Hortons’ stores are located.Oakville, Ontario and Miami – Burger King Worldwide Inc. (NYSE: BKW) has entered into a definitive agreement to buy Canadian restaurant chain Tim Hortons Inc. (NYSE: THI) for a reported $11.4 billion. According to a release, this merger will create the third-largest quick-service restaurant company in the world. The combined company will have more than 18,000 restaurants in 100 countries, and approximately $23 billion in annual sales. The new company will be based in Canada, where the majority of Tim Hortons’ stores are located. Under the terms of the transaction, which was unanimously approved by the board of directors of both companies, Tim Hortons shareholders will receive C$65.50 ($59.79 USD) in cash and 0.80 common shares of the new company per Tim Hortons share. Based on Burger King’s closing stock price as of Aug. 25, 2014, this represents total value per Tim Hortons share of C$94.05 ($85.78 USD).
Because the Brazil-based investment firm that controls Burger King, 3G Capital, already owns approximately 70 percent of the shares of Burger King and has committed to vote in favor of the combination, no shareholder vote is required of Burger King shareholders. 3G Capital will own approximately 51 percent of the new company. Following the closing of the transaction, each brand will be managed independently and maintain its respective headquarters—Tim Hortons in Oakville, Ontario, and Burger King in Miami. Burger King has obtained commitments for $12.5 billion of financing to fund the cash portion of the transaction, including commitments for a $9.5 billion debt-financing package led by JP Morgan and Wells Fargo. Berkshire Hathaway has also committed $3 billion of preferred equity financing.
— Scott Reid