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Warren Buffett To Finance Burger King-Tim Hortons Deal: WSJ

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UPDATE, Aug. 26: Burger King has confirmed it will merge with Tim Hortons in an $11 billion deal that will move Burger King headquarters to Canada.

A press release said Warren Buffett's Berkshire Hathaway is providing $3 billion in financing but will not be involved in operation of the new company.

Warren Buffett may have just sent Tim Hortons stock for another jump when markets open Tuesday following a report that the world’s best-known investor is financing a potential merger with Burger King.

Shares in both companies were already on a tear in Monday trading, up about 20 per cent each following news that the food chains are in serious talks for a deal that would see them form a new company based in Canada.

The Wall Street Journal reported Monday night that Berkshire Hathaway’s CEO is investing in the deal, providing 25 per cent of the financing according to “people familiar” with the talks. The deal is rumoured to be worth more than $10 billion.

Their merger, technically a takeover by Burger King’s parent company 3G Capital of the Canadian coffee chain, could happen later this week. It would create the world’s third-largest fast food chain.

The relocation to Canada would help Burger King trim its bottom line as corporate taxes are cheaper north of the border. It would also give the burger chain an increased presence in the ever-important coffee wars.

For Tims, it could help the coffee-and-doughnut chain expand in the U.S., where it has struggled to make a dent in the market.

The new company would have about $22 billion in sales with 18,000 restaurants in 100 countries.

Buffett is known as one of the world’s greatest stock pickers, so his stamp of approval on the deal is expected to send enthusiasm for the takeover even higher.

Huffington Post has contacted Tim Hortons and Burger King for comment.

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