MIAMI, FL – Burger King Worldwide agreed on Tuesday to buy the Canadian restaurant chain Tim Hortons for about $11.4 billion, creating one of the biggest fast-food operations in the world.
As part of the transaction, however, the American burger giant will move its home to Canada, where the combined company’s biggest market will be.
The two companies emphasized that each will continue to be run from their current home bases, with Tim Hortons operated out of Oakville, Ontario and Burger King from Miami. Neither is altering their franchisee agreements or business models.
This particular move could help give the Burger King a stronger foothold in the coffee and breakfast market.
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.
Help financing the transaction will come from Warren Buffett. Berkshire Hathaway, run by Warren Buffett, will buy $3 billion worth of preferred shares in the new company. Terms were not disclosed, but the preferred shares will pay an annual dividend of about 9 percent, according to a person briefed on the matter.