12/04/2014 04:11 EST | Updated 02/03/2015 05:59 EST

Tim Hortons, Burger King deal gets government OK

The federal government has approved Burger King's takeover of Tim Hortons, but with conditions intended to protect jobs at the iconic Canadian coffee and doughnut chain.

The merged company becomes the third-largest fast food company in the world, with sales totalling $23-billion annually.

Industry Minister James Moore issued a statement after markets closed Thursday announcing the government's approval under the Investment Canada Act.

The statement said Burger King agreed to the following conditions:

- To keep 100 per cent of Tim Hortons employees at franchises across Canada, and to preserve all of Tim Hortons' charitable work.

- To accelerate the opening of new Tim Hortons restaurants, both in the United States and globally.

- To establish the headquarters of the new company in Oakville, Ont., and to list the company on the TSX.

- To manage Tim Hortons as a distinct brand, without co-branding of any locations in Canada or in the United States.

- To maintain the Canadian franchisee rent and royalty structure at current levels for five years.

- To ensure Canadians represent at least 50 per cent of the membership of the Tim Hortons brand board of directors.

"The result of this transaction is this new global company, with sales of more than $23 billion annually, which will now be based in Canada,'' Moore said in the statement.

"Our government is pleased to see companies like Burger King investing in Canada’s economy and looking to benefit from our low taxes and open markets."

Canada's Competition Bureau approved the deal on Oct. 28, saying it is "unlikely to result in a substantial lessening or prevention of competition."

Critics of the deal had argued the $14-billion offer by 3G Capital — the Brazilian private equity firm that owns Burger King — would lead to widespread layoffs at Tim Hortons and have a negative impact in Canada.

Last month, Tim Hortons reported a 14 per cent drop in profit in the most recent quarter, as the chain was hit by costs related to the U.S. burger chain's deal to buy the company.

The new company will now have 18,000 stores in 100 countries.