US-based Burger King (BKW) is buying Canada-based Tim Hortons (THI) in an $11 billion deal which will create the world's third largest fast-food chain
US-based Burger King (BKW) is buying Canada-based Tim Hortons (THI) in an $11 billion deal which will create the world's third largest fast-food chain. The deal is being heavily criticized as a tax inversion strategy, which will allow Burger King to relocate to Canada and pay 20% less in corporate taxes. However, BKW denies taxes are the reason for the deal, instead insisting the company is looking to diversify its food offerings. Tim Hortons is a popular doughnut and coffee chain in Canada but isn't well-known outside the country. BKW management plans to expand Tim Hortons across the US and overseas. While the tax inversion aspect of the deal certainly won't hurt, the company still has pay US taxes on all American locations. However, it may not stop the US government from changing corporate tax laws to avoid such deals in the future.
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