Burger King just delivered Uncle Sam a real Whopper.
Burger King Inc. is buying Canadian doughnut outfit Tim Hortons in a move widely seen as a bid to lower its tax bills.
The Miami-based burger chain will plunk down $11 billion — some of it from billionaire Warren Buffett — to buy the iconic Canadian chain, and the new fast food behemoth will be headquartered in Ontario.
The move, confirmed Tuesday, will create the world’s third-largest fast food chain and signals BK’s strong play to capture bleary-eyed breakfast and coffee customers who typically flock to McDonald’s and Starbucks.
But the deal also appeared to be a ploy to lessen Burger King’s tax burden, a so-called tax inversion strategy that has been criticized by President Obama and Congressional leaders.
Setting up shop in the Great White North will allow Burger King to pay Canada’s friendly 26% corporate tax rate, a steep break from the U.S.’ nearly 40% rate, Forbes reported.
In the run-up to the deal, Burger King’s parent company said its flagship restaurant brand, which operates 14,000 locations, and the Tim Horton brand would be run independently, and Burger King’s operations would remain in Miami.