This is not entirely correct. The reduction in tax liabilities will be much smaller than you might expect and this is not a merger motivated purely by that. For an in depth discussion see [1].
Very interesting read, and thanks for the link. Had no idea that the King had fallen on such hard times (or maybe that Tim was comparatively doing so well) Almost double the owned assets ($1.5 B vs $0.8 B) and nearly triple the total revenue ($3.0 B vs $1.1 B). The King may be valued higher for its IP, but it appears like Tim is running a significantly better core business. Admittedly, Tim is basically a monopoly in its home market. At best, this looks like a merger of equals, rather than an inversion; if not a big, but unknown, player buying a weak, but well known, competitor in a new market. Very similar tact as many foreign companies (UK, Japan, German, Chinese) have done in other sectors like tech (doubled from 1996-2005). [1]
Right, I don't think that's the only motivation, but it seems like it's at least part of it. If I read that article correctly, almost half of Burger King's locations are outside the US and Canada, and the revenue all of those locations, as well as the Canadian ones (however many of those there are) should see a reduction in tax liability; further, that slice of the pie is growing, as Burger King's US presence is shrinking while its foreign presence is growing.
araes|11 years ago
http://www.reuters.com/article/2008/08/27/us-companies-owner...
apendleton|11 years ago