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Burger King Buying Canada's Tim Hortons for About $11B

2:08

Burger King confirmed Tuesday that it struck a deal to buy Canadian coffee and doughnut chain Tim Hortons for about $11 billion. Berkshire Hathaway Chairman and CEO Warren Buffett is helping to fund the deal by committing $3 billion of preferred equity financing. Amid speculation that the deal was motivated to save taxes by moving Burger King's headquarters to a foreign country, sources told Reuters the U.S. would receive at least as much in taxes, not less. Locating the new company's base in Canada was seen as a way to garner support from Canadian regulators, which tend to take a dim view of foreign acquirers, the sources said. Buffett's Berkshire will pay full taxes of about 35 percent instead of about 14 percent because the combined foreign company would be distributing dividends in the U.S., sources told CNBC. The deal, which has been approved by both company's boards, could help give Burger King a stronger foothold in the coffee and breakfast market to challenge McDonald's and Starbucks. Burger King and Tim Hortons said the chains will continue to be run independently and that Burger King will still operate out of Miami.

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--- CNBC.com, with The Associated Press and Reuters