Aug. 26--"Doughnuts!" Homer Simpson once mused in awe. "Is there anything they can't do?"
Well, apparently they can't get me to work myself into a froth aboot Burger King's effort to acquire Canada's beloved
Eh, meet meh.
Don't get me wrong. I want to care. I know I should. But despite my abiding interest in empty calories, caffeine and companies paying their fair share of U.S. taxes, there's no way to sugarcoat my ambivalence.
There's just not enough new here either to talk about or to eat. I am as unmoved as the frozen-faced version of the King the burger chain used as its mascot for a few memorably creepy years.
The tax angle -- Burger King using the acquisition of a Canadian company to become a Canadian company and lower its exposure to higher U.S. tax rates -- doesn't fire up blood the way, say, Deerfield-based pharmacy kingpin Walgreen did with its recent flirtation with becoming an expat in one of these so-called inversions.
Even the prospect of Hortons perhaps having a greater presence in Chicago, whether on its own or incorporated into existing Burger King outlets, must be viewed warily given past experiences. (Et tu, Krispy Kreme.)
Experts believe it's the business opportunities, rather than the chance to pay lower taxes, buy discount meds and pick up Cuban cigars, that have the King embracing Hortons and the Great White North.
Inversion is seen as a long-term play, and the private equity money behind Burger King may not want to stick around long enough to realize the benefits years down the road, assuming they fully materialize.
Don't forget the Walgreen board ultimately determined its inversion would prove too costly in almost every way imaginable. Not the least of considerations was uncertainty that the expected tax bonanza scheme would pass muster with the Internal Revenue Service, plus the threat of legislation to make such a move harder and less advantageous. It's also possible U.S. tax rates will be tweaked.
Burger King's "inversion piece ... exists, but it's not to the extent that some of the other deals have been announced, certainly, have in terms of savings," Christopher Geier, in charge of the investment banking practice at Sikich, a professional services firm headquartered in Naperville, told my colleague Jessica Wohl. This deal "probably has more to do with the business case and what they believe those two brands can do together, would be my guess."
Specifically, there is potential for co-branding and leveraging its new size for added muscle and cost savings in everything from the supply chain to real estate.
Now, if Burger King were yanking Tim Hortons' headquarters out of Canada, I'd bet dollars to doughnuts that would be a different situation. It certainly was when Ohio-based Wendy's acquired Tim Hortons in 1995, trying to achieve many of the same goals that Burger King is.
America isn't as infatuated with Burger King, which had about $8.5 billion in U.S. sales last year. That's just ahead of No. 3 Wendy's, which had about $8.35 billion in U.S. sales, while No. 1
Canada is on a first-name basis with Tim's.
"Tim's is as Canadian as maple syrup, poutine and freezing one's derriere off watching kids play hockey in a cold arena on a January weekend morning," a National Post editorial said in 2009, when the chain repatriated in Canada 14 years after being pulled across the border.
The Post said the homecoming seemed "only natural" given its dominance in its native land, where it was selling seven of every 10 retail cups of coffee and had more than twice as many outlets across the provinces as McDonald's.
But the newspaper knew that sentimental loyalty wasn't what brought Hortons back. Canadian federal corporate taxes, which had been 22 percent in 2007, were on their way down to 15 percent by 2012, making the old home a lot more hospitable.
From a business standpoint, what's changed on both sides of the border since Wendy's failed experiment with Tim Hortons is that breakfast, where Hortons excels, has grown only more important to fast-food bottom lines in the interim. Burger King can learn not only from Wendy's mistakes, but from what rivals have done.
If McDonald's can sell McCafe coffee in grocery stores, there's no reason Burger King couldn't sell Tim Hortons coffee in its restaurants and elsewhere.
Personally, I've found it takes a night out in Canada to fully appreciate a morning coffee in a Hortons. Throw in a paper Burger King crown, and maybe there's something there to get excited about.
But here in Chicago, it takes a lot to get pulses to quicken these days. The market for doughnuts may not be as saturated as their fat, but past experiences with everything from crullers to cupcakes have hardened our hearts a bit.
You want us really interested? Bring us something truly new, and maybe bring us a stent.