The Canadian government has given the green light for Burger King’s takeover of Tim Hortons, but it established some conditions that will protect workers at Canada’s largest coffee and doughnut chain.
Industry Minister James Moore issued a statement on Thursday stating that the federal government has approved the takeover under the Investment Canada Act.
The combined company will be the world’s third-largest fast food company, with sales of around $23 billion annually.
Burger King agreed to the following conditions:
- Ensure that all of Tim Horton employees keep their jobs at locations across Canada.
- Preserve all the charitable work of Tim Hortons.
- Expand and accelerate new Tim Hortons locations around the world.
- List the merged company on the TSX and have its headquarters in Oakville, Ontario.
- Operate Tim Hortons as distinct brand.
- Ensure that at least 50 percent of the members of the Tim Hortons brand board of directors are Canadian.
- Keep the current Canadian franchisee and royalty structure as it is for the next five years.
Moore said in the statement:
“The result of this transaction is this new global company, with sales of more than $23 billion annually, which will now be based in Canada,”
Adding:
“Our government is pleased to see companies like Burger King investing in Canada’s economy and looking to benefit from our low taxes and open markets.”
On October 28 the deal was approved by Canada’s Competition Bureau, which said that it is “unlikely to result in a substantial lessening or prevention of competition.”
Some people were against the buyout because they believed it would result in huge layoffs at Tim Hortons and have a negative impact in Canada.
The new combines company will operate around 18,000 stores in 100 countries.
Video – What is takeover?
A takeover is an acquisition, not a merger.