Innovation

The potential pitfall of a Tim Hortons-Burger King merger

A merger between Tim Hortons and Burger King makes sense financially. But merging corporate cultures is far more difficult

Written by Bruce Philp

From a business perspective, it’s not hard to see the sense in a marriage between Burger King and Tim Hortons. For Tim’s, it could prove to be Marc Caira‘s 50th anniversary masterstroke, a deal through which they might finally crack the U.S. market, and maybe find a new way to further monetize their real estate position here in Canada. With few places left to put stores, continued growth was always going to be a challenge here. Maybe Burger King can help Tim’s make more money with the ones they’ve already got.

READ: The Smart Way to Prepare for a Merger

For Burger King, the quid pro quo looks just as sweet. As the dominant party in this deal, they would now sit atop one of the world’s biggest fast food businesses, with a combined market value of more than US$18 billion. They, too, could certainly find a way to benefit from all that Tim Horton’s real estate. And by moving their head office to Canada €“ a controversial maneuver known in the US as an inversion €“ their corporate tax burden would be reduced dramatically. In all, the deal looks like one of those glittering win/win unicorns we hear so much about but rarely see. Both companies’ stocks surged more than 20% today, indicating the market agrees.

But from a branding perspective, it’s hard not to worry. Though this seems to be primarily a corporate deal, it’s nonetheless true that two brands and their cultures are going to be sharing the same bed, and this is where the differences are going to become stark. On one hand, you have Tim Hortons, a confident, well-loved category leader that knows exactly who it is. And on the other, you have Burger King, long the flailing Pepsi to McDonalds’ Coke, a brand that has often seemed to have no idea whatsoever of who it is. With DNA like that, the odds would appear to be 2:1 against either of them ending up stronger.

READ: Will your company culture fly in today’s economy?

Not that we should give up on this chimera just yet. Canada has a history of great brands overtaking the marketing cultures of the companies that bought them. TD Bank’s marketing was never so smart as it became after they absorbed Canada Trust. Telus wisely, and astonishingly, crawled into the shell of the Clearnet brand in all but name after that deal, and has apparently not regretted it for a minute. There are corporations out there wise enough not to buy a racehorse and then hitch it to a plow. If Burger King turns out to be one of those, this could yet be a roll-up-the-rim win for everybody.

Bruce Philp is a brand strategy consultant and author of Consumer Republic, winner of the 2012 National Business Book AwardOriginally appeared on PROFITguide.com