Burger King Acquiring Canadian Coffee Chain Tim Hortons

Burger King announces on Tuesday that they are acquiring the Canadian coffee and doughnut chain Tim Hortons in an $11 billion dollar deal. The aim is to convert Tim Hortons into a major player in the breakfast business in and outside of Canada. The new company will become one of the fastest growing fast food chains globally according to Burger King’s executive chairman, Alex Behring. Tim Horton’s could help Burger King become a part of the coffee and breakfast market within the USA which are currently controlled by Starbucks, Dunkin’ Donuts and McDonald’s. CEO of Tim Horton’s, Marc Caira, has mentioned the chain plans to re-design the stores to include couches and fireplaces as part of the efforts to be more noticeable in the U.S. Both parties will benefit from the deal, as Caira states that Tim Hortons will “win much quicker” within the U.S with Burger King’s help.

The lack of brand recognition will cause a struggle for Tim Horton’s to establish a clientele, especially while Starbucks is expanding its breakfast offerings and TacoBell are launching a national breakfast menu. McDonald’s also has plans to amp up the marketing for their breakfast business. Hopefully the newly partnered companies of Burger King and Tim Hortons will be able to successfully compete. The chains will continue to run independently in the sense that whoppers will not be on Tim Hortons menus, neither will doughnuts be offered at Burger King. CEO of Burger King Daniel Schawrtz states, “There’s no plans to mix the products or do co-branding.”

The new company will have roughly $23 billion in sales and over 18,000 locations after the deal is complete early next year. To read more about the acquisition and implications, click here

 

 

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