Burger King Worldwide Inc (NYSE:BKW) has announced on Sunday that it is in talks to buy Canadian doughnut-and-coffee chain, Tim Hortons Inc. (USA) (NYSE:THI). This deal, if realized, can create one of the biggest fast food businesses. Stocks of Burger King Worldwide Inc (NYSE:BKW) and Tim Horton soared in pre-market trading on Monday after the merger news. Burger King up 16.2% to $27.11 and Tim Hortons Inc. (USA) (NYSE:THI) jumped 16.96% to $62.84. Discussing the likely merger of Burger King Worldwide Inc (NYSE:BKW) and Tim Horton in program on CNBC, Jim Cramer said that this deal makes a lot of sense because both the companies deal in the similar domains and they can boost each other to form a terrific fast food chain.
Cramer said that Burger King Worldwide Inc (NYSE:BKW) is doing fine in the stocks, although it is not at its best potion in the market. On the other hand, Tim Hortons Inc. (USA) (NYSE:THI)’s numbers are great according to Cramer. He also said that both Burger King and Tim Hortons are good at breakfast products and if combined, they can set a standard for the segmented area of food chains.
“[…] They need each other, there are too many players in this area, coffee is a strong segment, that’s a good dove tail. Tim Hortons have been trying to do lunch, somewhat unsuccessful. Good deal for both stocks, should go higher,” said Cramer.
Cramer said that fast food domain is getting saturated and there is a lot of competition. He thinks that mainstream food chains are going slow in their growth and this creates a chance for Tim Hortons Inc. (USA) (NYSE:THI) and Burger King Worldwide Inc (NYSE:BKW) to cease the market.
Billionaire investor Jim Simons is one of the biggest shareholders of Burger King Worldwide Inc (NYSE:BKW), having 319,100 shares of the company.
Disclosure: None
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