Tim Hortons, Burger King deal OK'd by Competition Bureau
Watchdog says fast food industry competition won't be greatly affected
Canada's Competition Bureau has approved the takeover of Tim Hortons by U.S. burger chain Burger King, saying the deal is "unlikely to result in a substantial lessening or prevention of competition."
"The bureau has reviewed a specific proposed transaction and concluded that it will not, at this time, challenge that proposed transaction," the agency said in a release.
This summer, Burger King said it had a deal on the table to buy all outstanding Tim Hortons shares for $94 each, an almost 40 per cent premium over where shares were trading before the deal was announced.
The deal values Tims at $11 billion dollars and would create a quick-service food empire with $22 billion in system-wide sales across 18,000 restaurants in more than 100 countries.
The bureau has no objection to the deal as proposed on competition grounds, citing "the existence of a large number of competitors and the low barriers to entry in the fast food industry."
The deal still faces a few regulatory hurdles, although approval by Canada's competition watchdog is a major one. The two companies say they hope to finalize the deal by the end of this fiscal year once Tim Hortons shareholders vote on the deal, and it gets approval by Industry Canada and other U.S. authorities.