HONG KONG (CNNMoney) -- Burger King is in merger talks with Canadian coffee chain Tim Hortons, a deal that would allow the burger seller to relocate out of the U.S. and possibly cut its tax bill.
The new company would be headquartered in Canada, the two firms said in a joint statement. Both Tim Hortons and Burger King would continue to operate as standalone brands.
By moving north of the border, Burger King would be completing what is called an "inversion" -- a strategy that allows U.S. firms to lower their tax bills by merging with a foreign company, and then relocating to the new country.
Corporate tax rates are lower in Canada than the U.S., which has the highest tax rate among developed economies.
In the case of Miami-based Burger King and Tim Hortons, the combined company would be the world's third largest fast food chain, generating $22 billion in sales at more than 18,000 restaurants in 100 countries worldwide.
In the past decade, at least 47 U.S. companies have used the inversion process. Several inversions have been proposed this year and more are in the works.
One major inversion deal was announced in July, when Chicago-based AbbVie agreed to a $54.7 billion merger with Britain's Shire, slashing AbbVie's effective tax rate to about 13% by 2016 from 26%.
Drugmaker Mylan also announced last month that it would buy a Netherlands-based unit of Abbott Laboratories in a deal designed to let it incorporate abroad.
The flurry of deals has attracted the attention of Washington, and the White House has called on companies to practice "economic patriotism."
"They're declaring they're based someplace else even though most of their operations are here. .. My attitude is I don't care if it's legal -- it's wrong," President Obama said in July.
™ & © 2014 Cable News Network, Inc., a Time Warner Company. All rights reserved.
Shoppers seeking early deals
Holiday shopping got off to an early start.
BrandsMart security changes after 2013 chaos
The holiday shopping season got off to a rough start at BrandsMart last Thanksgiving as crowds pushed their way into the store. The…
Rat shuts Boca restaurant for 2nd time
The restaurant's manager didn't want to comment, but the owner of Saquella Caffe did. He gave a surprisingly honest and candid…
Facebook privacy changes you need to look at
Have you noticed the changes on your Facebook page? The Consumer Watchdog is breaking down the changes and shows you what to look at to make…
Cruise refunds hard to get without insurance
The Consumer Watchdog shows you the steps you need to take to protect your next cruise.