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Burger King buying Tim Hortons for about $11B; new co. to be based in Canada

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A Burger King sign and a Tim Hortons sign are displayed in Lower Sackville, Nova Scotia, Monday, Aug. 25, 2014. Burger King is in talks to buy Tim Hortons in hopes of creating a new, publicly traded company with its headquarters in Canada. (AP Photo/The Canadian Press, Andrew Vaughan) (The Associated Press)

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. 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.