It's official: American company Burger King purchases Canada's Tim Hortons.
Tim Hortons, the Canadian coffee and doughnut chain, didn't immediately agree with Burger King's offer since they recently started their multi-year strategic plan under new CEO Marc Caira.
After nearly six months and three offers, Tim Hortons finally agreed to the terms set up by Burger King Worldwide Inc. The burger chain's chairman, Alexandre Behring, approached Warren Buffet, asking the billionaire if he's willing to finance the merger worth $12.5 billion. Buffet approved the regulatory filings submitted by the two companies.
According to the takeover circular filed Tuesday, it was a culmination of six months of meetings over the phone and in person in Toronto and New York that ended with the backing of Buffet. Tim Hortons managed to raise the price of purchase three times in a total of 21 per cent. 20% of the company will still be owned by Tim Hortons' shareholders
Tim Horton's lawyer said, "Following further discussion among the board of directors, the Tim Hortons board of directors unanimously determined that the arrangement was in the best interests of Tim Hortons and authorized Tim Hortons management to finalize and execute the arrangement agreement."
The coffe and doughnut chain is deemed as a Candadian icon. Regarding this, the company demanded some conditions such as the protection for its Canadian operation. Tim Hortons also wish that the company stay in its home country with a meaningful number of Canadian executives. They also wish for the continues financial support the franchisees' renovations and to not raise the rents and royalties in five years.
Burger King and Tim Hortons combined will make the merged companies the third largest fast food restaurant in the world, with their stores totaling 18,000 in 100 countries. The Canadian company struggled to infiltrate the American market since they arrived in 1984. The baking operations of the company has been owned by a Swiss company since 2010.
