TORONTO (Reuters) - Canada will evaluate Burger King Worldwide Inc’s BKW.N proposed C$12.64 billion ($11.5 billion) bid for Tim Hortons Inc THI.TO to determine whether it would provide a net benefit to the country, Finance Minister Joe Oliver said on Tuesday.
He said Industry Canada would evaluate the deal. All such transactions above C$354 million are automatically reviewed by the federal government.
Oliver declined to comment on the merits of the deal but noted the Conservative government had cut corporate taxes since it came to power in 2006 in a bid to spur economic growth.
The two retailers plan to domicile the combined company in Canada, taking advantage of a lower corporate tax rate and more favorable tax treatment of overseas earnings. Such deals are known as tax inversions.
”Canada has moved to a highly competitive tax regime,“ Oliver told reporters after a meeting with technology executives. ”We moved corporate taxes since we’ve been in office from 20 percent to 15 percent and 11 percent for small companies.
“We believe this has been a constructive move that is designed to retain capital in this country, which results in more business expansion and more employment.”
(1 US dollar = 1.0955 Canadian dollar)
Reporting by Leah Schnurr; Writing by Alastair Sharp; Editing by Jeffrey Hodgson and Lisa Von Ahn