Burger King is buying Tim Horton’s and headed to Canada because of tax rates in the USA. Check it out…
MIAMI (AP) — Burger King says it struck a deal to buy Tim Hortons Inc. for about $11 billion, a move that would give the fast-food company a stronger foothold in the coffee and breakfast market.
The corporate headquarters of the new company will be in Canada, which stands to help lower Burger King’s taxes. Such tax inversions have been criticized by President Barack Obama and Congress because they mean a loss of tax revenue for the U.S. government. Burger King and Tim Hortons said the chains will continue to be run independently and that Burger King will still operate out of Miami.
Beyond any tax benefits, the tie-up could help each Burger King and Tim Hortons pose a greater challenge to market leaders such as McDonald’s and Starbucks. It also reflects a desire by both companies to expand internationally. Burger King, which has about 14,000 locations, has been striking deals to open more locations in developing markets. The company sees plenty of room for growth internationally, given the more than 35,000 locations McDonald’s has around the world. Tim Hortons has more than 4,500 locations, mostly in Canada.
Back in the U.S., breakfast and coffee have been hot growth areas in the fast-food industry. Between 2007 and 2012, breakfast grew faster than other segment in the restaurant industry at about 5 percent a year, according to market researcher Technomic. But it has long remained a weak spot for Burger King.
Read more: Breitbart