This article was last updated on April 16, 2022
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Sources have confirmed that Canada’s most popular coffee-chain, Tim Hortons, and international fast-food chain, Burger King, have acknowledged to be in negotiations to establish a new Canada-based joint venture that will may the world’s rank as the third-largest quick-service restaurant chain.
According to a joint press statement issued by the companies on late Sunday, since the companies are still in the negotiation phase there is no assurance that “any agreement will be reached or that a transaction will be consummated.” However, it was added that in case the deal follows through, the two chains would continue to operate as “standalone brands.” It was reported earlier by several sources that the two companies were discussing the new venture and that a key driver of the takeover discussions is the potential for Tim Hortons “to leverage Burger King’s worldwide footprint and experience in global development” and accelerate its growth in international markets. Whereas on the other hand, analysts confirm that Miami-based Burger King is attracted to take to take advantage of Canada’s corporate tax rates, since they are significantly lower than those of the U.S.
According to several analysts, lower taxation in Canada “would be the whole motivation for” Burger King. It was explained that “the typical corporate tax rate in the United States is in the neighbourhood of 40 per cent and that has chased a lot of corporations out,” noting the “hoopla” surrounding the exodus of several U.S. companies to Ireland and other European countries.
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