Burger King, the second-biggest burger chain in the US, made a joint statement with Tim Hortons, Canadas largest fast food service, to reveal that the two companies are negotiating a merger, with the former buying a stake in the latter.
“The new company would be the world’s third-largest quick service restaurant company, with approximately $22bn in system sales and over 18,000 restaurants in 100 countries worldwide,” the statement read.
The exact price of the acquisition has not been disclosed yet. According to people close to the negotiations, the companies have reached an agreement over all but a few terms, and the merger could be officially announced as early as this week.
According to the current terms, Burger King is to move its headquarters to Canada, to become the latest US company to make us of the so-called “tax inversion”, through which the US-based company redomiciles abroad to reduce the tax burden. The practice was publicly criticized by US President Barack Obama last month and his aides said measures will be taken against the flight.
As of the last closing price, the market value of Tim Hortons Inc. is $8.4bn, while Burger King Worldwide Inc. has a market capitalization of $9.6bn.
Burger King Worldwide Inc. was 1.01% up to close at $27.11 per share on Friday, marking a one-year change of +35.96%. According to CNN Money, the 7 analysts offering 12-month price forecasts for Burger King Worldwide Inc. have a median target of $30.00, with a high estimate of $31.00 and a low estimate of $23.00. The median estimate represents a +10.66% increase from the last price of $27.11.
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