Hi all! Andrea Janus here, reporter with CTVNews.ca. I'm dialed in to the news conference, which should be getting underway in a few moments.
Wow, a lot of you are opposed to the deal, according to our poll. Both companies said this morning that Tim Hortons' business model won't change and employment won't be affected.
Up first, prepared remarks by Marc Caira, president and CEO of Tim Hortons.
"It's a very exciting day for our company," Caira says. Tim Hortons marked its 50th anniversary in May, he says.
The Timbit is as much a symbol of Canada as the beaver and the Mountie, Caira says.
Today's announcement allows Tim Hortons to "introduce more of the world" to the company's products, Caira says.
The new company will be based in Canada and listed on the TSX and the New York Stock Exchange, Caira says. "Tim Hortons will still be Tim Hortons. We will still be the company of the Timbit and the Double Double."
The new deal allows the company to be "bolder," Caira says, and take the company to a global customer base.
Tim Hortons will be able to "leverage Burger King's global network" to build a strong brand, Caira says.
Caira praises Burger King for the strides it has made with its global expansion.
3G Capital, which will hold about 51 per cent of the new company's shares, "has a superb track record of enhancing and growing brands," Caira says.
Today's announcement is about "growth, growth of the Tim Hortons brand," Caira says.
Up next is Alex Behring, executive chairman of Burger King and managing partner at 3G Capital. He calls Tim Hortons "a remarkable brand."
Behring says Tim Hortons has "significant" potential for global growth.
By bringing the two brands under common ownership, they can leverage network and expertise of both companies to drive global growth for Tim Hortons.
Both companies will continue to be managed independently, Behring says. Though they will be able to share best practices, "we are committed to preserving the strength of each brand."
The new company will be headquartered in Canada, which represents the largest market of the combined companies, Behring says.
This is "not a tax-driven deal," Behring says. Burger King's tax rates will remain consistent. It's "about growth and creating value through accelerated international expansion."
The prepared remarks are over and reporters are now allowed to ask questions. The first one is about the tax implications for Burger King.
Daniel Schwartz, Burger King's CEO, says the company doesn't expect to see a meaningful change in its tax rate or significant tax savings.
Next question is about the threat from customers of a boycott against Burger King.
Schwartz says Burger King will continue to be based and managed in Miami, will continue to pay U.S. taxes, and will not change what it offers customers.
Schwartz says when combining two companies, you have to look at where their biggest market will be, and in this case it's Canada. Therefore, you put the head office in Canada.
Next question is when the new company will offer a dividend. Schwartz says they expect to continue paying a dividend, but too soon to say when.
The next question is about whether locations for the global headquarters have been scouted.
Tim Hortons will remain in Oakville, Caira says. As for where the global HQ of the new company will be, "it is way too early to get into that discussion."
Up next, a question about how the deal came about. Who approached who? Were the talks over Timbits or a Whopper, reporter jokes.
The question doesn't get a straight answer.
Looking at any key metric, such as market share, revenues, assets, employees, Canada is clearly the largest market, Schwartz says to question of whether the U.S. isn't really the larger market.
Caira says Tim Hortons is "fully committed to Canada," and dedicated to growing business in Canada. But it is looking for other opportunities in the U.S. and internationally.
Next question is what about this deal gives Tim Hortons hope that it can get a strong foothold in the U.S. and around the world.
Caira says he has confidence in Burger King and in 3G. "They are young, aggressive, active partners," and Tim Hortons looks forward to leveraging Burger King's infrastructure, he says.
Next question is about 3G's operational involvement in Tim Hortons.
Schwartz says 3G will search the talent pools of the management teams of both companies and put together the best management team of the new company possible.
Caira says Tim Hortons employees may have career opportunities around the world thanks to new partnership with Burger King.
I don't agree with this. If Tim Hortons is forced to lower its standards to Burger King's level, I will no longer be a customer. Burger King in Canada anyways, is a brand that has lost its luster and have nothing but run down locations that microwave burgers before handing them out the window. I'm turned off because of this.
This is a 3G Berkshire Hathaway deal. The 3GBH take over of Heinz resulted in 1370 job losses in Canada and the US along with three plant closures. The 3GBH buyout of Burger King resulted in half of it's corporate staff losing jobs. How is this not going to result in any Tim Horton's job losses?
