Famous burger chain Burger King has recently acquired the Canadian coffee chain Tim Hortons for 11 billion dollars. The Miami-based burger chain plans to relocate to Canada. Hearing this, many U.S politicians believe Burger King’s real purpose behind this acquisition is to avoid American tax, which is 40 percent while Canadian tax is 26 percent. However, Burger King disagrees with this accusation.

“We don’t expect our tax rate to change materially, this transaction is not really about taxes. It’s about growth.” said Daniel Schwartz, who is the Chief Executive at Burger King. What Schwartz is saying can be be proved; The Brazilian private firm 3G bought 70 percent of Burger King’s shares and practically owns the burger chain. For the past few years, together Schwartz and 3G expanded Burger King in China, Russia and Brazil.

Personally, this Burger King- Tim Hortons deal will only be beneficial if the two use each other to climb up the ladder. What this means is that, for example, Tim Hortons can make use of Burger King’s stable place in the foreign market as an advantage to develop and become a more successful franchise. Likewise, Burger King can improve on its breakfast business by implementing similar products from Tim Hortons. By any means, Burger King made the correct choice to purchase Tim Hortons.

Burger King buys Tim Hortons for $11 billion

Article: http://www.businessweek.com/articles/2014-08-26/the-burger-king-tim-hortons-deal-isnt-about-taxes