Burger King is currently engaged in discussions to acquire coffee and doughnut chain Tim Hortons in a deal that would expand its product base in Canada and save corporate taxes.
Both the parties are working on a deal that would create a new company with a market capitalization of roughly $18bn.
The new entity would be touted as the world's third-largest quick service restaurant and would be based in Canada.
The tentative deal is seen as a so-called tax inversion scheme, an increasingly common legal manoeuvre that allows US companies to take on the nationality of another country by buying a company there and lower tax burden in its home base.
The acquisition of Tim Hortons would expand Miami-based burger chain's presence in the lucrative coffee market. Recently, Burger King partnered with the Starbucks-owned Seattle's Best Coffee to make headway in the high-margin java business.
3G Capital, the majority owner of Burger King, will continue to own the majority of the shares in the new combined entity on a pro forma basis, with the remainder held by existing shareholders of Tim Hortons and Burger King.
Founded in 1954, Burger King operates over 13,000 locations in nearly 100 countries and territories across the globe while Tim Hortons operates more than 3,500 system wide restaurants in Canada and over 850 in the US.
