Burger King Worldwide Inc. is negotiating to buy Canadian coffee and doughnut chain Tim Hortons Inc. and relocate its base to the U.S. neighbor, where corporate tax rates are lower.
Canada's largest coffee merchant and the Miami-based burger chain majority owned by 3G Capital are in talks to form the world's third-largest quick-service restaurant group, they said in a statement dated Aug. 24. Canada's corporate tax rate is 26.5 percent, compared with 40 percent in the U.S., according to audit, tax and advisory firm KPMG's website.
3G Capital will own the majority of the shares of the new company, with the remainder held by other shareholders of Tim Hortons and Burger King, which will operate as stand-alone brands, according to the statement. Deals by U.S. companies seeking to lower their corporate tax bill by acquiring overseas rivals drew criticism last month from President Barack Obama, and his aides vowed action to curtail the practice.