The companies had said on Sunday that they were
in talks, and shares of both soared on Monday.
Tim Hortons shareholders will receive C$65.50 in cash and 0.8025
shares of the new company for each of their shares. Based on
Monday's close, the deal values Tim Hortons at C$94.05 a share.
Tim Hortons' New York-listed shares rose 12 percent to $83.50 in
premarket trading. Burger King was up 5 percent at $33.96.
Burger King Executive Chairman Alex Behring and Chief Executive
Officer Daniel Schwartz will hold the same positions at the
combined company. Tim Hortons CEO Marc Caira will be vice
The company is to be based in Canada, its largest market.
Investors and tax experts say the main reason for Burger King to
move its domicile to Canada is to avoid having to pay double
taxation on profits earned abroad, as the company would have to
do if it remained in the United States.
Warren Buffett's Berkshire Hathaway BRKa.N has committed $3
billion of preferred equity to finance the deal but will have no
role in managing the business, the companies said.
3G Capital, Burger King's majority owner, is expected to retain
about 51 percent of the combined company.
(Reporting by Allison Martell in Toronto and Ashutosh Pandey in
Bangalore; Editing by Savio D'Souza and Lisa Von Ahn)
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