According to a report in the Wall Street Journal on Tuesday, billionaire investor Warren Buffett and Berkshire Hathaway are going to help Burger King with financing as part of their merger plans with Tim Hortons, a Canadian doughnut and coffee chain.
Buffett’s participation, and the overall price structure, has not yet clearly been defined at this time. The discussions about Buffett’s part of the deal are still ongoing, said the Wall Street Journal while quoting people that are familiar with the transaction.
Some individuals believe that Berkshire Hathaway will receive compensation in the form of preferred shares. Another person said that Berkshire Hathaway – Warren Buffett’s company – is actually going to provide roughly 25% of the overall financing.
This plan was announced by both companies on Sunday, and the Wall Street Journal said that the final deal would roughly value about $10 billion, and it would be announced in a few days.
The current market value of the two companies is $18 billion.
On Sunday, the group said that the company would be based in Canada and the stock would also be traded there, since this is where their largest market is located.
Being based out of Canada would also allow the company to benefit from the favorable tax code in Ottawa.
It is conceivable that Buffett might take flack for the deal because of his outspoken position that the ultra rich in the United States should actually pay more money in taxes.