Tim Hortons Inc. has agreed to be purchased by Burger King
Worldwide, Inc., which would create the third-largest fast food
company in the world with estimated combined sales around $23
billion USD and restaurants in 100 countries (reported here). The merger would provide Tim Hortons
with expansion opportunities into new markets.
As part of the proposed transaction, the combined headquarters
would be located in Canada, where the company would benefit from a
lower corporate tax rate, and the company would be listed on the
TSX. The proposed merger is expected to help accelerate the
expansion of Tim Hortons.
The merger was subject to a formal review by the Competition
Bureau of Canada. Parties must generally notify the Bureau of a
proposed transaction when the assets in Canada or revenues of the
target firm generated in or from Canada exceed $82 million CAD
(this threshold increases annually), and when the combined Canadian
assets or revenues of the parties and their respective affiliates
in, from, or into Canada exceed $400 million CAD.
The Bureau concluded on October 28, 2014 that the proposed
merger would not lead to a substantial lessening or prevention of
competition. The primary reason for this decision is that there are
a large number of competitors in the fast food industry, as well as
the low barriers to entry into the market. The proposed transaction
received clearance from United States anti-trust regulators in
The merger was also subject to a review under the Investment
Canada Act. Non-Canadian WTO member investors must generally notify
Investment Canada of a proposed transaction to acquire control of a
Canadian business when the assets of the Canadian business exceed
$354 million CAD (this threshold increases annually).
On December 4, 2014, the proposed transaction was approved by
Industry Canada. As part of the approval, the companies agreed not
to combine their brands in Canada or the United States, so that Tim
Hortons will continue to be managed as a "distinct
brand." Other conditions include continuing current employment
levels, and that Canadians must be at least 50% of Tim Hortons'
board of directors.
If the proposed transaction proceeds, the brands will be managed
independently but will be able to rely on combined resources and
expertise to expand their markets.
Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global legal practice. We provide
the world's pre-eminent corporations and financial institutions
with a full business law service. We have more than 3800 lawyers
based in over 50 cities across Europe, the United States, Canada,
Latin America, Asia, Australia, Africa, the Middle East and Central
Recognized for our industry focus, we are strong across all
the key industry sectors: financial institutions; energy;
infrastructure, mining and commodities; transport; technology and
innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global
business principles of quality, unity and integrity. We aim to
provide the highest possible standard of legal service in each of
our offices and to maintain that level of quality at every point of
Norton Rose Fulbright LLP, Norton Rose Fulbright Australia,
Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South
Africa (incorporated as Deneys Reitz Inc) and Fulbright &
Jaworski LLP, each of which is a separate legal entity, are members
('the Norton Rose Fulbright members') of Norton Rose
Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein
helps coordinate the activities of the Norton Rose Fulbright
members but does not itself provide legal services to
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should be
sought about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Legalizing cannabis for non-medical or "recreational" use is one of the most anticipated changes to Canadian society. In his election campaign, Prime Minister Justin Trudeau promised to legalize and regulate non-medical cannabis use.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).