The famous billionaire investor Warren Buffett is helping to finance Burger King's much talked-about takeover of Tim Hortons, a Canadian coffee and doughnut chain, sources are telling the Wall Street Journal.
Sources told the Journal that Buffett's company Berkshire Hathaway would provide 25% of the financing. He's investing in the form of preferred shares, according to sources who spoke with the Journal.
The takeover — valued at around $10 billion — will likely be announced in the next few days, according to the Journal. The boost from Buffett will likely make investors more enthusiastic about the deal, the Journal pointed out.
Burger King shares were already up as much as 22% on Monday following the news that it was in negotiations to take over the Canadian doughnut chain.
As Business Insider's Haley Peterson has written, the offer is likely a part of a huge cost-cutting plan for Burger King, which has been trying to reinvent itself in recent years. The deal will allow Burger King to move its headquarters to Canada, which could help it save money on taxes. After the takeover, Burger King and Tim Hortons will have 18,000 restaurants in 100 countries, and it will be worth about $18 billion.
In an in-depth article this summer called "Burger King Is Run By Children," Bloomberg Businessweek noted the fast-food giant had been acting more like a startup than a burger chain lately.
3G Capital, a Brazilian private equity firm, bought Burger King for $4 billion in a leveraged buyout in 2010, that article pointed out. 3G also owns H.J. Heinz along with Buffett's Berkshire Hathaway. 3G's co-founder, a 74-year-old billionaire, likes to bring in young executives to shake things up, Bloomberg Businessweek reported.
In just 13 months on the job, Burger King's 33-year-old CEO Daniel Schwartz fundamentally restructured the burger chain, as BI's Hayley Peterson noted last month.
A wunderkind with no fast-food experience, Schwartz spent his first months on the job making burgers, cleaning toilets, and interacting with customers in actual Burger King restaurants. He soon realized a complicated menu was slowing things down, so he streamlined Burger King's offerings.
His restructuring appears to be paying off. In the first quarter of this year, Burger King's net income nearly doubled to $60.4 million.
SEE ALSO: Burger King's Tim Hortons Offer Is Part Of A Huge Cost-Cutting Plan