In late August, Oakville, Ontario-based Tim Hortons Inc. and Miami-based Burger King Worldwide Inc. announced a definitive agreement under which the two companies will create a new global powerhouse in the quick service restaurant sector. With approximately $23-billion in system sales, over 18,000 restaurants in 100 countries and two strong independent brands, the new company will have an extensive international footprint and significant growth potential. The new global company will be based in Canada, the largest market of the combined company.
Tim Hortons and Burger King each have strong franchisee networks and iconic brands with loyal customer bases. Following the closing of the transaction, each brand will be managed independently, while benefitting from global scale and reach and sharing of best practices that will come with common ownership by the new company. Alex Behring, Executive Chairman of Burger King and Managing Partner of 3G Capital, said, “By bringing together our two iconic companies under common ownership, we are creating a global QSR powerhouse. Our combined size, international footprint and industry-leading growth trajectory will deliver superb value and opportunity for both Burger King and Tim Hortons shareholders, our dedicated employees, strong franchisees, and partners. We have great respect for the Tim Hortons team and look forward to working together to realize the full potential of these two extraordinary businesses.” Marc Caira, President and CEO of Tim Hortons noted that as an independent brand within the new company, the transaction will enable the company to move more quickly and efficiently to bring the Tim Hortons brand to a new global customer base.
At the time of closing, Behring will lead the new global company as Executive Chairman and Director and Caira will be appointed Vice Chairman and a Director, focused on overall group strategy and global business development. Daniel Schwartz, CEO of Burger King, will become Group CEO of the new company, with overall day-to-day management and operational accountability. The new company’s board will include the current eight Burger King directors and three directors to be appointed by Tim Hortons, including Caira. The current Tim Hortons headquarters in Ontario will continue to be the global home of the Tim Hortons business and Burger King’s current headquarters in Miami will continue to be the global home of the Burger King business.
Global investment firm, 3G Capital will retain all of its investment in Burger King by converting its roughly 70 percent equity stake in Burger King into equity of the new company. On a pro forma basis, 3G Capital is expected to own approximately 51 percent of the new company with the balance of the common shares to be held by current public shareholders of Burger King and Tim Hortons. The transaction is subject to customary closing conditions, including approval of Tim Hortons shareholders and receipt of certain anti-trust and regulatory approvals in Canada and the U.S. Since 3G Capital already owns approximately 70 percent of the shares of Burger King and has committed to vote in favor of the combination, no shareholder vote is required of Burger King shareholders.
Tim Hortons is one of the largest publicly-traded restaurant chains in North America based on market capitalization, and the largest in Canada. As of June 29, 2014, Tim Hortons had 4546 systemwide restaurants, including 3630 in Canada, 866 in the United States and 50 in the Gulf Cooperation Council. Founded in 1954, Burger King is the second largest fast food hamburger chain in the world. The Burger King system operates in about 14,000 locations in 98 countries and territories worldwide. Approximately 100 percent of the Burger King restaurants are owned and operated by independent franchisees.
Tim Hortons Inc – 874 Sinclair Rd., Oakville, Ontario L6K 2Y1 (905/845-6511 www.timhortons.com)
Burger King Worldwide Inc. – 5505 Blue Lagoon Dr., Miami-Dade County, Florida (866/394-2493 www.bk.com)
3G Capital – 600 Third Ave., 37th Floor, New York, New York 10016 (212/893-6727 www.3g-capital.com , info@3g-capital.com)