Regardless of how successful the Tim Hortons Canadian fast food chain acquisition turns out to be for Burger King, Warren Buffett and Berkshire Hathaway will certainly profit on this deal.
Documents recently filed with regulators show us what Berkshire Hathaway is going to receive because they put up $3 billion in order to help finance the $11 billion purchase.
Berkshire Hathaway will get 9% interest on their $3 billion. Plus, they will also get warrants to purchase 8.4 million shares in the new company.
In total, the penny warrants given to Berkshire Hathaway will represent 1.75% of the combined stock of the new company.
The terms are similar to other investment deals that Buffett had made in order to bolster financial companies, including General Electric and Bank of America, which took place during the financial crisis.
This is the second deal that Berkshire Hathaway has made with 3G Capital, which controls Burger King, based out of Miami. Just last year, Berkshire Hathaway and 3G teamed up in order to purchase H.J. Heinz for $23.3 billion.