Burger King has said that it is in talks with Canadian coffee chain Tim Hortons regarding a merger of the companies to create the world’s third-largest fast-food group.

The potential deal would create a company with a stock market value of about $18bn (£10.9bn; 13.6bn euros) and an estimated revenue of $22bn a year from around 18,000 restaurants over 100 countries.

The move would see the two brands retain their separate identities but save costs by sharing corporate services and locating the group HQ in Canada where Tim Hortons is already based and where corporation tax is lower.