Burger King confirmed on Tuesday that it is to buy the Canadian coffee-and-doughnut chain Tim Hortons for about $11bn, in a deal that re-ignited the controversy over American companies moving their headquarters abroad to secure lower tax rates.
As part of the acquisition, the corporate headquarters of the new company will be in Canada, a move that may help Burger King lower its tax burden but exposed the company to a welter of criticism after it was confirmed.
The deal will bring 18,000 restaurants in 100 countries under the control of Brazilian private equity firm 3G Capital. Burger King already operates 14,000 restaurants in 98 countries, nearly all of which are franchisee-owned.
Burger King’s operational headquarters will continue to be based in Miami, Florida, and Tim Hortons will run its business from Oakville, Ontario. The brands will continue to operate independently, the companies said.
3G Capital will own about 51% of the new company. Warren Buffett’s Berkshire Hathaway is helping finance the Tim Hortons deal with $3bn of preferred equity financing, but will not have a role in managing operations.
The announcement met an immediate backlash on Burger King’s Facebook page. “If you attempt to buy Tim Horton’s for the purposes of evading US Taxes, I will NEVER step foot in another Burger King again,” wrote Facebook user Gabe Gibbons. By 10.30am ET more than 1,400 other users liked the comment, and hundreds replied.
On Twitter, users expressed their distaste for the company going abroad with the hashtags #BoycottBurgerKing and #BoycottBK.
Bernie Sanders, the independent junior senator from Vermont, said on Tuesday that Americans were “sick and tired” of big corporations “not paying their fair share of taxes”.
 |
The deal will bring 18,000 restaurants in 100 countries under the control of Brazilian private equity firm 3G Capital. Burger King already operates 14,000 restaurants in 98 countries, nearly all of which are franchisee-owned.
Burger King’s operational headquarters will continue to be based in Miami, Florida, and Tim Hortons will run its business from Oakville, Ontario. The brands will continue to operate independently, the companies said.
3G Capital will own about 51% of the new company. Warren Buffett’s Berkshire Hathaway is helping finance the Tim Hortons deal with $3bn of preferred equity financing, but will not have a role in managing operations.
The announcement met an immediate backlash on Burger King’s Facebook page. “If you attempt to buy Tim Horton’s for the purposes of evading US Taxes, I will NEVER step foot in another Burger King again,” wrote Facebook user Gabe Gibbons. By 10.30am ET more than 1,400 other users liked the comment, and hundreds replied.
On Twitter, users expressed their distaste for the company going abroad with the hashtags #BoycottBurgerKing and #BoycottBK.
Bernie Sanders, the independent junior senator from Vermont, said on Tuesday that Americans were “sick and tired” of big corporations “not paying their fair share of taxes”.
No comments:
Post a Comment