Antitrust Law Daily Wrap Up, TOP STORY: Canada Competition Bureau will not challenge Burger King-Tim Hortons merger, (Oct 28, 2014)
Organizations Mentioned:Burger King Worldwide Inc. | Tim Hortons Inc. | Tim Hortons, Inc.
The Competition Bureau announced today that it has issued a No Action Letter (NAL) with respect to Burger King’s acquisition of Tim Hortons.
The Bureau concluded that this transaction is unlikely to result in a substantial lessening or prevention of competition due to, among other things, the existence of a large number of competitors and the low barriers to entry in the fast food industry. The transaction is subject to other regulatory approvals.
The NAL stated that the Bureau has reviewed a specific proposed transaction and concluded that it will not, at this time, challenge that proposed transaction before the Competition Tribunal under the mergers provisions of the Competition Act.
In August 2014, Burger King announced that it had reached an agreement to acquire Tim Hortons, creating a new global “powerhouse in the quick service restaurant sector.” The new global company will be based in Canada, the largest market of the combined company. Both Burger King and Tim Hortons will continue to operate after the closing as standalone, independent brands leveraging global shared services and best practices.
According to Burger King’s announcement, as part of the new company’s commitment to Canada: (1) Tim Hortons will continue to manage its own operations, headquartered in Oakville, Ontario, and continue its significant community involvement; (2) the transaction will not change the way Tim Hortons works with its franchisees or its business model; and (3) there will be no changes to restaurant-level employment and the new company will rely heavily on the Tim Hortons talent pool to staff the new organization at all levels of responsibility. As a result, the global company’s management and shared services operations will consist of a meaningful number of Canada-based executives.
Founded in 1954, Burger King is the second largest fast food hamburger chain in the world. Burger King operates in approximately 14,000 locations in 98 countries and territories worldwide, including 300 restaurants in Canada.
Tim Hortons is one of the largest publicly-traded restaurant chains in North America and the largest in Canada. As of June 29, 2014, Tim Hortons has 4,546 system wide restaurants, including 3,645 in Canada.
Companies: Burger King Worldwide Inc.; Tim Hortons Inc.
MainStory: TopStory Antitrust