By Jonathan Davies

Burger King has announced a deal to buy Canadian coffee and doughnut chain Tim Hortons for $11bn (£6.6bn).

The deal will create the world's third largest fast food chain with 18,000 restaurants in 100 countries.

3G Capital, the majority shareholder of Burger King will own a 51% stake in Tim Hortons. The merged company will have a market capitalisation of around $18bn and sales of around $25bn a year.

As news of talks between Burger King and Tim Hortons were confirmed, Burger King's shares shot up 19.5% with Tim Hortons up by a slightly lower 19%.

Canada's corporation tax is believed to be a key reason behind Burger King's intentions to buy Tim Hortons. In the US, corporation tax is 35% but in Ontario, Canada where Tim Hortons is based, it is 26.5%.

The two companies will continue to operate as separate brands, but will save money by sharing corporate services.

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