Yet another American company is aiming to move its headquarters out of the country.
International fast food behemoth Burger King Worldwide Inc. confirmed Tuesday that it will pay about $11 billion to buy Canadian chain Tim Hortons Inc., which sells coffee, donuts, and other breakfast food fare. The deal would merge America's second-largest burger chain, which is valued at nearly $10 billion, with the Canadian equivalent to Dunkin' Donuts, which is valued at more than $8 billion. It would also move the new company's headquarters to Canada, where corporate taxes are significantly lower.
The newly merged company would become the world's third-biggest "quick service restaurant company," with more than 18,000 restaurants in 100 countries, said Burger King and Hortons in a statement Monday. The deal would create a business capable of rivaling Yum Brands, which owns Taco Bell and Pizza Hut, and is valued at more than $30 billion. But while Yum Brands operates from Louisville, KY, the new Burger King and Tim Hortons parent company would likely station itself in the Ontario province of Canada.
On the surface, the reason for a headquarter shift across the country's northern border is simple: lower corporate taxes.
As we have have noted before, when a company reincorporates abroad, as the practice is known, what it's really doing is shifting its corporate citizenship; and when a company shifts its corporate citizenship, what it's really doing is trying to pay less in taxes. The nominal corporate tax rate in the U.S., which combines national, state, and city-level tax rates, is nearly 40 percent—the highest across all 34 Organization for Economic Cooperation and Development (OECD) member countries. Canada's, by comparison, is just over 26 percent.
Good for Canada in general and Ontario in particular.Another blow to America and I found it ironic that Obama was telling BK to be "patriotic". Perhaps he should build a wall at the northern border to keep American companies from moving to Canada . All the while leaving the southern border at Mexico wide open to illegal immigrants. Barry Ombama -America's bizzaro leader !
ReplyDeleteThis is a good deal for Canada in general and for Ontario in particular. It's another blow for America as I find it ironic that Obama was urging BK to be "patriotic" .This from a leader who leaves the southern border at Mexico wide open to illegal immigrants. Maybe he'll order a big wall to be built at the northern border to keep American companies from moving to Canada. Barry Obama -America's bizarro president !
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