Links : http://business.financialpost.com/2014/08/25/burger-kings-potential-tim-hortons-takeover-unlikely-to-spark-uptick-in-tax-inversions/
http://business.financialpost.com/2014/08/25/tim-hortons-burger-king-takeover/
In an attempt to avoid high corporate tax rates Burger King is considering a merger with Canadian company Tim Horton’s meaning Burger King would be ba
sed in Canada and paying Canadian Corporate taxes. This may be a sign of trouble for Americans, as other large corporations may follow the lead of Burger King and relocate to ‘tax havens’ (other locations with lower taxes example Bahamas or Barbados). However, from the Canadian perspective this may be good news as the revenue from Burger King is now generated into the Canadian economy.
Looking at this it is seemingly obvious what Burger King would gain in the merger, but what about Tim Hortons? Looking at the brands history it has not done so well south of the Canadian border in the States where it faces competitors such as McCafe and Dunkin’ Donuts by merging with Burger King Tim Horton’s could gain exposure to American consumers.Nonetheless, this merger will benefit both brands as they become the third largest fast food chain in the world.
Looking at this from the other side, however, this may not be good news for fast food chains in America or the American economy if Burger King relocates to Canada and Tim Hortons is promoted in Burger King’s across the States which will take a larger chunk of consumers from other fast food restaurants.