The major reason for citizenship change was to reduce the tax base as it reduced to 26% when both companies combined. Canada usually has a lower tax rate compared to the United States. This move was marred with controversy as many claimed that was tax inversion and it even attracted the attention of president Obama as it was viewed the country’s economy would suffer. Over and above there was no illegality in the relocation hence the company would enjoy lower tax rates ultimately improved the company’s profitability (Shabi, 2012). One of the synergy to be enjoyed by burger king includes revenue synergy. One of the revenue synergy to gain from would be an increase in its market share as by acquiring TimHorton the company also acquired its customers. The company would easy penetrate the Canadian market as TimHorton controlled a large stake of the Canadian market. The acquisition would result to a combined 18000 restaurants in over 100 countries with total sales amounting to $ 23 billion. Based on burger king would be listed on both the New York stock exchange and Canadian stock exchange. Burger king would also enjoy distribution channels used by TimHorton. Companies buy companies to reach new markets and grow revenues and earnings. A merge may expand two companies marketing and distribution, giving them new sales opportunities. A merger can also improve a companys standing in the investment community: bigger firms often have an easier time raising capital than smaller ones.
Burger king would enjoy cost reduction synergies, which include increased economies of scale. The bigger the company the better the purchasing power as size matters. The increase of size would lead to increase in goods sourced from suppliers. Greater quantities would result to increase in discounts offered. This would result in cost reduction and hence increase the organisation productivity.