Burger King Worldwide Inc., the second-largest U.S. burger chain, is in talks to buy Tim Hortons Inc. and move its headquarters to Canada, becoming the latest American company to seek a relocation to a lower-tax nation.
Burger King, which is majority-owned by 3G Capital, would create the world's third-largest fast-food chain by merging with Canada's bigger seller of coffee and doughnuts, the companies said in a statement. 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.
The deal threatens to renew debate over American companies shifting their headquarters internationally in search of a lower corporate tax bill. The practice, known as inversion, drew criticism last month from President Barack Obama. His aides vowed the administration would act to curtail the practice.
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, according to the statement. The two chains will operate as stand-alone brands, the companies said.
The combined business would have about $22 billion in sales and more than 18,000 restaurants in 100 countries, according to the statement. The deal is subject to negotiation, and neither company plans to comment further until an agreement is reached or discussions are discontinued. -- Bloomberg News