Long-awaited Burger King-Tim Hortons Merger Completed - Analyst Blog

Restaurant Brands International (QSR-WI) announced the completion of the merger between Tim Hortons Inc. and Burger King Worldwide, Inc., worth roughly $11.0 billion. The two brands will continue to operate independently under the new global quick service restaurant — Restaurant Brands International.

As of Dec 12, 2014, shares of Tim Hortons and Burger King Worldwide common stock have stopped trading on the Toronto Stock Exchange and New York Stock Exchange, respectively. The shares of Restaurant Brands International will commence trading on the Toronto Stock Exchange and New York Stock Exchange under the symbol QSR from Dec 15, 2014.  Further, shares of Restaurant Brands International Limited Partnership – a subsidiary of Restaurant Brands International – will start trading on the Toronto Stock Exchange under the symbol QSP the same day.   

Restaurant Brands International would be the world’s third-largest fast-food company with a market value of roughly $18 billion. The combined business is expected to generate about $22 billion in sales and constitute more than 18,000 restaurants in 100 countries.

Earlier, on Dec 10, 2014, the Tim Hortons shareholders had approved the long-awaited transaction. However, the Burger King shareholders were not required to vote on the merger since 3G Capital, which owns approximately 70% of the company, had already approved the deal.

However, it had not been easy for either of the companies to close the deal. The merger, announced in August this year, received approval from the Canadian government only last week after Burger King agreed to comply with certain conditions. (Read: Burger King-Tim Hortons Merger Gets Canadian Approval).

Moreover, the deal has been the talk of the town for a while now owing to tax issues. The location of the headquarters of the new company has been a bone of contention ever since the deal was announced. Burger King was criticized as some thought that the deal was intended to derive benefits from tax inversion by shifting the headquarters of the new company to Canada. The deal did not find favor with the White House either. Also, many expressed their disappointment on social media websites like Facebook, Inc. (FB) and Twitter, Inc. (TWTR). Rumors that the deal would result in extensive layoffs at Tim Hortons further added fuel to fire.

Better-ranked stocks in the restaurant sector are BJ’s Restaurants, Inc. (BJRI) and DineEquity, Inc. (DIN), both of which sport a Zacks Rank #1 (Strong Buy).

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