Federal government approves Tim Hortons take-over

The Canadian franchisee rent and royalty structure will also remain the same for five years…if I was a tim hortons owner i would be selling before the 5 years are up.

The Toronto Star
December 4, 2014

Federal government approves Tim Hortons take-over
Burger King says new company will maintain employment levels, keep headquarters in Canada.
The Canadian Press

Tim%20Hortons.jpg

Tim Hortons shareholders will vote on a proposed take-over by Burger King on Dec. 9. Richard Lautens/THE TORONTO STAR

OTTAWA—The federal government approved the takeover of Tim Hortons Inc. by Burger King Worldwide Inc. on Thursday after securing promises on jobs and that the coffee shop chain will remain a distinct brand.

Industry Minister James Moore signed off on the deal following a review of the agreement under the Investment Canada Act.

“The result of this transaction is this new global company, with sales of more than $23 billion annually, which will now be based in Canada,” Moore said in a statement after the close of markets on Thursday.

“Our government is pleased to see companies like Burger King investing in Canada’s economy and looking to benefit from our low taxes and open markets.”

As part of the approval, the company has agreed to maintain the existing employment levels at Tim Hortons franchises across Canada and expand in the U.S. and globally faster than planned.

The combined company will also establish its headquarters in Oakville, Ont., where Tim Hortons is currently based, and “maintain significant employment levels” at the office.

It will list on the Toronto Stock Exchange and maintain Tim Hortons as a distinct brand, without any co-branding in Canada or the United States.

The Canadian franchisee rent and royalty structure will also remain the same for five years.

Burger King agreed in August to buy Tim Hortons in a friendly deal worth more than $12 billion in stock and cash.

The Competition Bureau approved the deal in October when it issued a “no action letter” after concluding the deal was unlikely to reduce competition.

Tim Hortons shareholders are expected to vote on the proposal at a special meeting on Dec. 9.

The merger of the two companies would create the world’s third-largest quick service restaurant company, with about $23 billion in system sales and more than 18,000 restaurants in 100 countries.

Critics have warned the takeover could mean layoffs and strict cost-cutting for Tim Hortons.

A study from the Canadian Centre for Policy Alternatives suggested the debt financing required could force Tim Hortons to lay off more than 700 employees — or 44 per cent of staff working outside its restaurants.

The report also suggests that Tim Hortons could spin off its distribution and manufacturing centres.

Tim Hortons has said it plans to keep the brand independent and maintain “traditional levels of community support, restaurant-level jobs and franchisee relationships.”

Comments

1. hjk50
Lousy coffee chain merging with a loust burger chain. Not going anywhere, except if I was a tim hortons owner i would be selling before the 5 years are up.

2. left2write
I cannot even understand why they are so popular! Their coffee is dreadful and their baked goods are inedible! Even though they will now American owned I am sure they will continue their sappy branding as part of our Canadian identity which is completely sicking.

3. Dave
“Our government is pleased to see companies like Burger King investing in Canada’s economy and looking to benefit from our low taxes and open markets.”

I don't think taking a major Canadian corporation south of the border is investing in us. It's more like taking us over.

Another US company has taken over another Canadian firm. How can this country be self sufficient and strong if all the corporate profits end up in the US?

If the US buys enough of our companies they will be able to dictate to us what we should be doing. I'm not sure they aren't already.« less

4. cheezemeister
@Dave
It's not a US company. It's a Brazilian company that owns both Burger King and now Tim Hortons.

5. deber
This actually deserves an article? The Cons will do anything right now with the upcoming election.
Fantino for PM!!!!!

6. culture
Well there is still the Canadian company Balzacs , not so many cafes yet but hey lets support them

7. aym
Just looked at the capitalization of the companies. Both BK and Timmie's are around 12/11 billion respectively. But McD's…. a whopping 92-95B.

http://www.thestar.com/business/2014/12/04/federal_government_approves_tim_hortons_takeover.html


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