Photo cred - Andrew Vaughn for The Canadian Press
Yesterday's rumour has become today's reality, as Miami-based fast food chain Burger King has confirmed it will be buying out Canada's most widespread coffee spot, Tim Hortons, for the price of $11 billion, according to the Gazette.
In total, the new BK-TH hybrid will be worth a total of $23 billion and own more than 18, 000 restaurants in 100 countries, reports Global. Both companies will retain their respective headquarters (BK in Miami, TH in Oakville, Ont.) while the new company itself will be based in Canada, but can potentially span globally.
Burger King's most likely made the purchase and move for tax benefits in Canada, a strategic relocation called a tax inversion. America's corporate tax rate totals at around 40%, whereas Canada's sits a much lower 26.3%, so the savings (and motivation) are pretty clear.
Tim Hortons looks to be getting the raw end of the deal. Corporate analyst Peter Sklar told the Toronto Star that Tim Hortons, while uber-popular in Canada, has limited appeal elsewhere, and the brand doesn't stand to make much money in other nations, despite now being able to expand globally. BK, on the other hand, will save a bunch of money on taxes and potentially expand their coffee-donut menu.
We're still just waiting on the announcement of a donut-bun whopper, which, again, would make this whole corporate kerfuffle worth it.
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