Warren Buffett to Invest in Burger King’s Planned Deal for Tim Hortons

Berkshire Hathaway Expected to Provide About 25% of Financing, Thrusting Billionaire Into U.S. Tax Debate.

Investor Warren Buffett is helping finance Burger King Worldwide Inc. planned takeover of Canadian coffee-and-doughnut chain Tim Hortons Inc. according to people familiar with the matter, in a surprise twist that thrusts the billionaire into a debate over U.S. taxes.

Mr. Buffett’s Berkshire Hathaway Inc. would invest in the deal in the form of preferred shares, some of the people said. Berkshire is expected to provide about 25% of the deal’s financing, one of the people said. The exact structure of Mr. Buffett’s participation remains unclear and the discussions are ongoing.

Shareholders cheered the potential tie-up Monday after the companies confirmed they were in discussions, sending stock in both companies soaring. Mr. Buffett’s backing of the deal may add to that enthusiasm given his reputation for shrewd investing.

The investment would also thrust Mr. Buffett, known for championing American companies like Coca-Cola Co. KO +0.46% and for advocating that wealthy individuals pay their fair share of taxes, into an uncomfortable position at the center of a spirited debate over U.S. tax policy. The deal is to be structured as a so-called inversion that would move the new company’s headquarters to Canada. Such deals, which can help companies sidestep taxes, have drawn stiff opposition in Washington.

It would also mark Berkshire’s latest partnership with Burger King’s controlling shareholder, 3G Capital Management. Mr. Buffett and 3G Capital joined in 2013 to take over H.J. Heinz & Co. in a $23 billion deal.

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