Burger King Worldwide Inc (BKW), Tim Hortons Inc. (USA) (THI) Deal: Warren Buffett Is Playing a Big Role

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It is now confirmed that Burger King Worldwide Inc (NYSE:BKW) is taking over Tim Hortons Inc. (USA) (NYSE:THI), the Canadian coffee-and-doughnut chain. Reports are now emerging that Warren Buffet will help Burger King Worldwide Inc (NYSE:BKW) in this takeover by offering an investment of $3 billion in preferred equity financing. In a program, CNBC‘s Andrew Ross Sorkin discussed the role of Warren Buffet in the Burger King Worldwide Inc (NYSE:BKW), Tim Hortons Inc. (USA) (NYSE:THI) deal.

Burger King

“[…] It’s a $3 billion loan, it part of the $12 billion financing package, the rest of the money coming from JP Morgan and Wells Fargo, but, of course, Warren Buffet’s emergence is part of this transaction in the middle of a conversation about inversions, perhaps changing the discussion or at least heightening or highlighting the discussion about inversions […],” said Sorkin.

Sorkin referred to some sources and claimed that Burger King Worldwide Inc (NYSE:BKW)’s deal with Tim Hortons Inc. (USA) (NYSE:THI) will not affect the tax base in the US because of the fact that Burger King Worldwide Inc (NYSE:BKW) has already a tax rate of 27% in the US which will now go down to 25%. The other reason supporting this claim is that after the deal, Burger King will become a Canadian company and it will be paying dividends to the US Company, Berkshire Hathaway, which is offering $3 billion.

Sorkin said that tax inversion can become a political issue in the long term because both the companies are moving their combined company’s tax domicile to Canada. He thinks that the large scale success of Tim Hortons Inc. (USA) (NYSE:THI) in Canada will ultimately make its potential space in the US and this is the ultimate goal of Canadian investors.

Billionaire investor Jim Simons is one of the biggest shareholders of Burger King Worldwide Inc (NYSE:BKW), having 319,100 shares of the company.

Disclosure: None

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