As of yesterday, Burger King Worldwide Inc. and Tim Hortons Inc have confirmed discussions pertaining to a possible merger. This deal, if it were to go through, would cause BK to move its headquarters out of the United States and into Canada. However, they would not be changing the names; both will remain as standalone brands.
According to CNN Money, this strategic move would cut Burger King’s tax bill by a substantial amount, since corporate tax rates are lower in Canada. This process, called “inversion,” has been far too common with US companies in the past 10 years. In this decade alone, over 45 different companies in the US have “inverted,” relocating outside of the country.
President Barack Obama made a statement in July about his disapproval of companies utilizing the inversion process, and he “[doesn’t] care if it’s legal, it’s wrong.” Besides the “economic unpatriotism,” these inversions also raise the concern of reducing jobs in the country.
Burger King is currently the world’s 7th largest fast food chain, and this merger would move the new company to 3rd largest. Tim Hortons is Canada’s largest fast food chain with close to 4,500 restaurants internationally. McDonald’s Corporation is the 1st largest fast food chain in the world, with KFC and Subway coming in 2nd and 3rd, respectively.
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