Tim Hortons Shareholders Vote to Sell Company to Burger KingCraig Giammona
Tim Hortons Inc. shareholders approved the sale of the doughnut chain to Burger King Worldwide Inc. for about $11 billion, paving the way for the creation of the world’s third-largest fast-food company.
About 99 percent of votes cast by shareholders were in favor of the deal, Oakville, Ontario-based Tim Hortons said today in a statement. The new combined business will be called Restaurant Brands International, the company said.
The takeover, which is expected to close later this week, will shift Miami-based Burger King Worldwide’s headquarters to Canada in a so-called inversion. Such moves have been criticized by U.S. lawmakers because they’re seen as a way to avoid paying taxes. Burger King has said that its relocation to Canada won’t materially change its tax rate. Canadian regulators approved the deal last week.
“We are well positioned after this transaction to take Tim Hortons’ brand around the world,” Chief Executive Officer Marc Caira said today at the shareholder vote.
Inversions may cost the U.S. government an estimated $2.2 billion in lost tax revenue next year, a record level. President Barack Obama has called inversions an “unpatriotic loophole.” His nomination for Treasury undersecretary -- investment banker Antonio Weiss -- also has drawn objections from some Democrats because of his work on the Burger King deal for Tim Hortons.
The transaction, which gives Burger King control of the biggest seller of coffee and doughnuts in Canada, was announced Aug. 26. Warren Buffett’s Berkshire Hathaway Inc. provided Burger King with $3 billion in financing for the deal and will earn 9 percent annual interest on the investment. Jorge Paulo Lemann’s 3G Capital, which previously teamed up with Buffett to take H.J. Heinz Co., controls Burger King.
The combined business will have about $23 billion in sales, with more than 18,000 restaurants in 100 countries, according to Tim Hortons.
The new name reflects the global ambitions of the merged company, said Daniel Schwartz, Burger King’s CEO. He will lead the combined business, which will trade on the New York Stock Exchange and Toronto Stock Exchange under the ticker QSR -- an abbreviation for “quick service restaurant.”
The Restaurant Brands International moniker “conveys our mission to create the world’s leading global restaurant business,” he said.
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