Berkshire Hathaway Inc. (NYSE:BRK.B)’s outspoken vice-chairman, 90-year-old Charlie Munger has a very clear opinion of anyone who thinks that the move of Burger King Worldwide Inc (NYSE:BKW)’s corporate headquarters to Canada following the Tim Hortons merger was an injustice: they’re “stark raving mad”. Betty Liu reported today on Bloomberg on some of the recent comments made by Munger, including his relationship with Berkshire Hathaway Inc. (NYSE:BRK.B) chairman and CEO Warren Buffett.
“Munger became a billionaire himself, helping Buffett build Berkshire Hathaway into a powerhouse. They’re a dynamic duo at the Berkshire meetings. He says his biggest contribution was to basically act as a sounding board to Buffett; or as Munger puts it, ‘I think Einstein needed somebody to talk to’,” Liu said.
Discussing the recent merger between Burger King Worldwide Inc (NYSE:BKW) and Canadian coffee and donut chain Tim Hortons, which Berkshire Hathaway Inc. (NYSE:BRK.B) played a major role in financing, Munger said anyone who thinks it’s some great tragedy or injustice is “stark raving mad”, and that “it’s a non-event”.
Critics of the deal contend the move to Canada is unpatriotic and unfair, and senators in Washington are now launching a campaign to exert pressure on Burger King Worldwide Inc (NYSE:BKW) to have them scrap their merger or refrain from moving their tax base to Canada as part of the deal. They currently pay 35% taxes in Florida, while their proposed new home in Ontario, Canada would charge them 26.5%.
For their part, Berkshire Hathaway Inc. (NYSE:BRK.B) and Burger King Worldwide Inc (NYSE:BKW) argue that the move to Canada makes sense on more than one level. For starters, the combined company will have a larger presence in Canada than it will in the U.S, owing to the vast scope of Tim Horton’s operations in Canada, and the fact that Burger King Worldwide Inc (NYSE:BKW)’s own footprint in Canada was larger than that of Tim Horton’s in the U.S.
Of greater concern to Berkshire Hathaway Inc. (NYSE:BRK.B) and the other involved parties was that a move of Tim Horton’s base to the U.S likely would have been shot down by Canadian regulators, owing to the fact that the company is somewhat of an institution and cultural icon in the country. Despite the protestations, it’s expected the merger will be finalized before the end of the year.