When I think Tim Hortons, I think of a greasy paper-thin burger cooked over fire. What, you don’t? Well, too bad, because Burger King and Tim Horton’s executives have agreed to merge. And, as with all deals involving Americans and Canadians, it’s actually an American buy-out.
Burger King Worldwide Inc. agreed to “acquire” Tim Hortons Inc. for $12.5 billion, which should be waved through once Tim Hortons’ shareholders agree to it. What do the Americans have to gain? Well, plenty. Burger King gets to expand its breakfast offering to compete with McDonald’s (though, those breakfast burritos are amazing), and the parent company will pay lower taxes by being based in Canada. America, you may remember, despite giving the appearance of being a government-less, tax-free wasteland/paradise, actually has the highest corporate tax rate in the world, while Canada has the second lowest in the OECD.
As for Canada, what’s the gain? Well, pride for one. Our beloved symbols are being acquired by foreigners, but it won’t be the first time! Wendy’s bought Timmies in 1996 and owned it for a number of years, until a 2006 IPO. It’s practically a Canadian tradition! And, I take pride in the knowledge that 10 years from now we may be sold off again in another bizarre house-flipping operation where the house flips the flippers. Our biggest gain, however, is the potential third-largest fast food empire being based in Canada, and thus paying Canadian taxes. It acts as additional proof that when taxes are lower, we can actually get more tax revenue by attracting new players to us.
Most importantly, maybe Burger King will stop being so bad! Wendy’s somehow became the “health-focused” burger joint after it’s Canadian flirtation, promoting salads and whatnot, while inventing the delicious monstrosity that it the Baconator (pictured here, NSFW). It’s fitting, considering Tim Horton’s promotes soups and paninis while being best known for selling deep-fried sugarbread and putting cream cheese and bacon on a jalapeno-asiago bagel for you. If the Canadian touch means that Burger King can improve their paltry offering, everyone will be better for it.
Now, Berkshire Hathaway (Warren Buffet’s machine that takes in oxygen and spits out money), has committed $3 billion to the deal. Given its status as a printing press, it’s likely that this deal has some merit to it. The fact that big names are putting their weight behind a not-born-in-Canada-but-still-based-in-Canada deal shows confidence in our economic ambitions.
The only hiccup is that American regulators hate when companies relocate to avoid taxes. It’s kind of like basing all your operations in another country because you don’t want to hemorrhage billions unnecessarily, except Americans think you’re doing it because you hate the country, freedom, etc. While Obama may still be able to kill the deal, it looks like this could be another success story of a corporate overlord learning a bit more about itself through the continued domination of Tim Hortons. Let’s just hope we get the Kinginator soon, and that no one touches my Timbits.