Burger King Worldwide Inc. is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc., a deal that would be structured as a so-called tax inversion and move the hamburger seller's base to Canada.
The two sides are working on a deal that would create a new company, they said in a statement, confirming a report on the talks by The Wall Street Journal. The takeover would create the third-largest quick-service restaurant provider in the world, they said.
Inversion deals have been on the rise lately, and are facing stiff opposition in Washington given that they threaten to deplete U.S. government coffers. A move by Burger King to seal one is sure to intensify criticism of them, since it is such a well-known and distinctly American brand.
In 2010, Brazilian private-equity firm 3G Capital Management bought Burger King and took the chain known for its Whopper burgers private. A few years later, the company structured a complex deal with an investment vehicle co-owned by Mr. Ackman to go public again, while retaining control of the company.
3G, which has offices in Rio de Janeiro and New York, has become a major player in the U.S. food sector, with a taste for iconic brands. Billionaire co-founder Jorge Paulo Lemann was a big shareholder in brewer InBev and helped engineer its 2008 acquisition of Anheuser-Busch. 3G last year teamed up with Warren Buffett to buy U.S. ketchup maker H.J. Heinz Co. for $23 billion, one of the largest deals of the year.
A key rationale for the deal is the potential to leverage Burger King's expertise in global development to boost Tim Hortons' international growth, the companies said, adding they plan operate the two as stand-alone brands................
Related book: DREAM BIG: How the Brazilian Trio behind 3G Capital - Jorge Paulo Lemann, Marcel Telles and Beto Sicupira - acquired Anheuser-Busch, Burger King and Heinz