Burger King has agreed to acquire Tim Hortons for about $11 billion in a deal that would bring the combined company's base to Canada. Berkshire Hathaway Chairman and CEO Warren Buffett will chip in about $3 billion in financing to help the two companies.

Buffet and his company is providing some financial assistance for the merger but will not participate in operation or management of the business.

Tim Hortons is a Canadaian-based coffee and doughnut restaurant that dominates the Canada coffee market. Unlike the United States, Canadians' "go-to" coffee shop is Tim Hortons, not Starbucks.

The combined company of Burger King and Tim Hortons would create the world's third largest quick-service restaurant company. In terms of sales, the combined company would have about $23 billion in system sales across over 18,000 worldwide locations. By comparison, McDonald's has over 35,000 worldwide locations.

The tax advantages for Burger King made this deal attractive. Not only do they acquire the popular Tim Hortons company, but they also will receive lower tax rates by moving the company's home base to Canada. Both restaurants will still operate separately and retain their names.

"By bringing together our two iconic companies under common ownership, we are creating a global [quick service restaurant] powerhouse," said Alex Behring, executive chairman of Burger King and managing partner of 3G Capital. 

In order to fund the deal, Burger King came up with commitments of $12.5 billion of financing; $9.5 billion of debt financing will come from J.P. Morgan and Wells Fargo.

Burger King's Chief Executive Daniel Schwartz will be the CEO of the new company. Behring will be executive chairman. Tim Hortons CEO Marc Caira will transition to the position of vice chairman.

What it means to Tim Hortons Shareholders

For each share of Tim Hortons (THI) that shareholders own, they will receive $65.60 (Canadian dollar) as well as 0.8025 shares of the new company. 

Shares of the new combined company will trade on the New York Stock Exchange as well as the Toronto Stock Exchange.