Executives said the two chains will continue to be run independently. That means people shouldn't expect to see Timbits — Tim Hortons' miniature doughnuts — alongside Whoppers on Burger King menus.
"There's no plans to mix the products or do co-branding," said Daniel Schwartz, CEO of Burger King and a principal of 3G Capital.
Burger King executives also stressed the deal wasn't being driven by a desire for lower tax rates: Schwartz said the company doesn't expect to achieve any "meaningful tax savings."
3G Capital will own about 51 percent of the new company. Last year, the firm also teamed up with Warren Buffett's Berkshire Hathaway to buy ketchup maker H.J. Heinz Co.
Berkshire Hathaway is also helping finance the Tim Hortons deal with $3 billion of preferred equity financing, but will not have a role in managing operations.
Under the deal, Burger King will pay $65.50 Canadian ($59.74) in cash and 0.8025 common shares of the new company for each Tim Hortons share. This represents total value per Tim Hortons share of $94.05 Canadian (US$85.79), based on Burger King's Monday closing stock price. Alternatively, Tim Hortons shareholders may choose either all-cash or all stock in the new company.
Tim Hortons stock was up nearly 9 percent at $81.25. Burger King's shares were down 2 percent to $31.63.