MIAMI—Burger King Worldwide and TimHortons Inc. have made it official, announcing Tuesdaythat the Miami-based burger chain had agreed to buy the donut makerin a stock-and-cash deal worth $11.4 billion. The 60-year-oldBurger King will remain headquartered in Miami, although theholding company for both brands will be based in Canada, where TimHortons is located.

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Although the bulk of the financing for the acquisition will comefrom a $9.5-billion debt financing package led by JPMorgan and Wells Fargo, WarrenBuffet's Berkshire Hathaway is committing$3 billion of preferred equity. Berkshire will only be a fundingsource and will play no role in management or operations of the newcompany, which among other things will seek to roll out the TimHortons format, largely concentrated in Canada, to a globalcustomer base. The two brands will be managed independently.

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3G Capital, which currently controls 70% ofBurger King equity, will have an approximately 51% stake in the newcompany, which will be the third largest in thequick-service restaurant sector. Shares of the newparent company are expected to be listed on the New York andToronto stock exchanges.

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When the deal closes, Alex Behring, executivechairman of Burger King and managing partner at 3G Capital, willlead the new global company as executive chairman anddirector. Burger King CEO Daniel Schwartzwill become group CEO, while Tim Hortons' president and CEO,Marc Caira, will be appointed vicec hairman and adirector. The new company's board will include the current eightBurger King directors and three directors to be appointed by TimHortons, including Caira.

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“Over the past four years, we have transformed Burger King intoone of the fastest-growing and most profitable QSR businesses inthe world, through successful international growth, a consistentfocus on brand revitalization and strong commitment to ourfranchisees,” says Schwartz. “We are excited to build on thisprogress as we continue to expand Burger King around the world andlook forward to working with and learning from Tim Hortons as wetogether create the world's leading global restaurantbusiness.”

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Tuesday's announcement occurs about 36 hours after the twocompanies issued a joint statement confirming that they were innegotiations for a merger. It's being structured as a tax inversionto take advantage of Canada's lower corporate tax rate; Tim Hortonsis headquartered in Oakville, Ont.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.