MIAMI (TheBlaze/AP) — Burger King confirmed Tuesday that it struck a deal to buy Tim Hortons Inc. for about $11 billion, a move that could help give the fast-food company a stronger foothold in the coffee and breakfast market.

Confirmed: Burger King Is Heading to Canada

An illuminated Burger King sign is seen on August 25, 2014 in Washington, DC. Fast-food chain Burger King plans to buy Canadian chain Tim Hortons in an acquisition that will make it the world’s third largest in the fast-food sector. As part of the deal, Burger King will move its headquarters to Canada where the company would benefit from Canada’s more favorable tax code. Mandel Ngan/AFP/Getty Images

The corporate headquarters of the new company will be in Canada, which may also help Burger King lower its taxes. Such tax inversions have been criticized by President Barack Obama and Congress because they mean a loss of tax revenue for the U.S. government. Burger King and Tim Hortons said the chains will continue to be run independently and that Burger King will still operate out of Miami.

The Miami Herald assuaged local fears Monday, writing:

…the company said Monday that its Burger King unit would still be based in Miami, where it was founded 60 years ago, and no local employees would be affected.

“Burger King Corporation will not be relocating to Canada,” said Miguel Piedra, spokesman for Burger King Corp. “We will continue to operate as our own standalone business unit and our global headquarters will remain here in Miami, where we have been since 1954. Pending the closing of the transaction, the newly created parent company will be based in Canada as will Tim Hortons, which will continue to be based in Ontario.”

The tie-up could help each Burger King and Tim Hortons chains pose a greater challenge to market leaders such as McDonald’s and Starbucks. It also reflects a desire by both companies to expand internationally. Burger King, which has about 14,000 locations, has been striking deals to open more locations in developing markets. The company sees plenty of room for growth internationally, given the more than 35,000 locations McDonald’s has around the world. Tim Hortons has more than 4,500 locations, mostly in Canada.

Back in the U.S., breakfast and coffee have been hot growth areas in the fast-food industry. Between 2007 and 2012, breakfast grew faster than other segment in the restaurant industry at about 5 percent a year, according to market researcher Technomic. But it has long remained a weak spot for Burger King.

McDonald’s led the category with 31 percent of the market in 2012, while Burger King had just 3 percent to 4 percent, according to Technomic.

Under the deal, Burger King Worldwide Inc. will pay $65.50 Canadian ($59.74) in cash and 0.8025 common shares of the new company for each Tim Hortons share. This represents total value per Tim Hortons share of $94.05 Canadian (US$85.79), based on Burger King’s Monday closing stock price. Alternatively, Tim Hortons shareholders may choose either all-cash or all stock in the new company.

Who’s behind the deal?

As the Wall Street Journal reported, Warren Buffet’s Berkshire Hathaway will provide financing.

Tim Hortons stock rose more than 10 percent in Tuesday premarket trading. Burger King’s shares fell slightly.

This story has been updated.

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