This story has been updated from 11:34 am EDT with comments from a conference call with reporters.
NEW YORK ( The Deal) -- Burger King Worldwide ( BKW) confirmed Tuesday that it agreed to acquire Tim Hortons ( THI) in an $11 billion merger structured as a tax inversion.
The announcement comes one day after the two restaurant chains confirmed they were in talks about a deal.
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The deal puts more pressure on McDonald's ( MCD) breakfast program, with Burger King getting one of Canada's largest coffee and breakfast chain operators. The new combined company will become the world's third-largest quick service operator behind McDonald's and Subway operator Doctor's Associates in terms of number of stores.
Oakville, Ontario-based Tim Hortons was once controlled by Burger King rival Wendy's ( WEN) .
Tim Hortons shareholders have the option to receive C$65.50 in cash and 0.8025 shares of the new company for each share, or either C$88.50 in cash or 3.0879 shares of the new company.
Miami-based Burger King has received a $12.5 billion commitment from JP Morgan Chase & Co. and Wells Fargo Bank NA to fund the cash portion of the deal. Warren Buffet's Berkshire Hathaway Inc. has also committed $3 billion in financing.
3G Capital, which owned a 70% stake in Burger King before the deal was announced, will own a 51% stake in the new combined company by converting its shares into equity. The private-equity firm took Burger King private in 2010 for $4 billion then took it public again in 2012.
The new combined will operate more than 18,000 restaurants worldwide, across 100 countries and will have about $23 billion in combined sales.
"We are excited to build on this progress as we continue to expand Burger King around the world and look forward to working with and learning from Tim Hortons as we together create the world's leading global restaurant business," said Burger King CEO Daniel Schwartz in a statement.
"As an independent brand within the new company, this transaction will enable us to move more quickly and efficiently to bring Tim Hortons iconic Canadian brand to a new global customer base," added Tim Hortons CEO Marc Caira in a statement.
What this transaction does is "give us the chance to share with the world what Canadians already know and love," Caira said on a conference call with reporters on Tuesday. "We will be able to leverage a global network and learn from their experience" in building a strong global QSR brand.
"We are very confident that we can grow much quicker in this ... battle called the U.S.," Caira said later on the call.