Burger King Worldwide Inc., Miami, announced on Aug. 26 that it is buying Tim Hortons Inc., Oakville, Ontario, for approximately $11.4 billion in cash and stocks. One of the largest publicly-traded restaurant chains in North America and the largest in Canada, Tim Hortons had 4,546 restaurants—3,630 in Canada, 866 in the U.S. and 50 in the Gulf Cooperation Council—as of June 29, 2014.
With approximately $23 billion in annual sales, more than 18,000 restaurants in 100 countries and two independent brands, the new company will have an extensive international footprint and significant growth potential, according to a press release on Burger King’s website.
Following the closing of the transaction, each brand will be managed independently, while benefitting from global scale and reach and sharing of best practices that will come with common ownership by the new company.
At the time of closing, Alex Behring, executive chairman of Burger King and managing partner at 3G Capital, will lead the new global company as executive chairman and director. Marc Caira, president and CEO of Tim Hortons, will be appointed vice chairman and a director, focused on overall group strategy and global business development. Daniel Schwartz, CEO of Burger King, will become Group CEO of the new company, with overall day-to-day management and operational accountability. The new company’s board will include the current eight Burger King directors and three directors to be appointed by Tim Hortons, including Caira.
Caira and Schwartz will continue as Tim Hortons and Burger King CEOs, respectively, through the transition period, and additional executives in the new global company structure will be identified from Burger King and Tim Hortons during the transition period and announced at the time of closing. Both Burger King and Tim Hortons will continue to operate after the closing as standalone, independent brands.
According to Burger King press release, Tim Hortons’ current headquarters in Oakville will continue to be its global home, while Miami will continue to be the global home of Burger King. The new global company reportedly will be based in Canada.
The transaction is subject to customary closing conditions, including approval of Tim Hortons shareholders and receipt of certain antitrust and regulatory approvals in Canada and the U.S. Since 3G Capital, which owns approximately 70% of the shares of Burger King, has committed to vote in favor of the combination, no shareholder vote is required of Burger King shareholders.