MIAMI-- Burger King is buying Canadian coffee-and-doughnut chain Tim Hortons Inc. for about $11 billion, creating the world's third-largest fast-food company. The corporate headquarters of the new company will be in Canada, a move that may help Burger King lower its taxes.

Burger King will still run its business out of Miami.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.

Burger King could reclassify itself as a foreign company and pay the Canadian tax rate, which is significantly less burdensome than the high American corporate tax rate. VPC

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.

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

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