TORONTO (AP) — Burger King Worldwide Inc.'s takeover of the Canadian coffee and doughnut shop chain Tim Hortons Inc. was approved by the Canadian government Thursday, bringing it one step closer to completion.
Burger King, which is based in Miami but controlled by a Brazilian private equity fund, agreed in August to buy Tim Hortons in a friendly cash-and-stock deal worth more than $10.5 billion (CA$12 billion). The merger of the two companies would create the world's third-largest quick service restaurant company, with more than 18,000 restaurants in 100 countries.
As part of the deal signed by Canada's Industry Minister James Moore, Burger King agreed to maintain the existing employment levels at Tim Hortons franchises across Canada and expand in the U.S. and globally faster than planned as part of the approval.
The combined company will establish its headquarters in Oakville, Ontario, where Tim Hortons is currently based, and "maintain significant employment levels" at the office.
Critics had warned the takeover could mean layoffs and cost-cutting for Tim Hortons. A study from the Canadian Centre for Policy Alternatives suggested the debt financing required could force Tim Hortons to lay off more than 700 employees.
The merged company will list on the Toronto Stock Exchange and Tim Hortons will remain a distinct chain from Burger King in the U.S. and Canada.
The deal still requires shareholder approval. Tim Hortons shareholders are expected to vote on the proposal at a special meeting on Dec. 9.