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* * * * * * WEDNESDAY, AUGUST 27, 2014 ~ VOL. CCLXIV NO. 49 WSJ.com HHHH $2 .00

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What’sNews

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World-Widen Israel and Hamas agreedto their first open-endedcease-fire after seven weeksof military confrontation andwill resume truce talks inCairo in the coming days. A1n A U.S. citizen who foughtwith Islamic State in Syriawas shot dead in a battlewith rival Syrian fighters. A6n Putin and Poroshenko heldtalks but produced no break-through for ending the con-flict over eastern Ukraine. A5n The U.S. is on course torun out of immigrant-inves-tor visas because of a surgein Chinese participation. A3n French President Hollandenamed a new government ofcore allies to push throughhis pro-business platform. A5n Liberia’s Ebola crisis willlikely worsen in the weeks tocome, the African country’spresident warned. A7n FBI field offices said in asurvey that they have run intoconflicts with other federallaw-enforcement agencies. A3nA Connecticut officialwhoran the state’s insurance ex-change was picked to head thefederal HealthCare.gov. A4n A U.S. prosecutor in Texasis the leading candidate to runthe Immigration and CustomsEnforcement agency. A4n The VA’s watchdog saidno patient deaths in thePhoenix system were directlycaused by long wait times. A4n At least 1,400 childrenwere victims of sexual exploi-tation around a northern Eng-lish town, a report said. A5

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Burger King defended aroughly $11 billion deal

to buy Tim Hortons as itcame under criticism for itseffort, backed by Buffett, torelocate to Canada. A1, B1n The S&P 500 closed above2000 for the first time, ris-ing 2.10 points to 2000.02, 16years after the index brokethrough 1000 points. C1n Durable-goods orderssurged 22.6% in July from amonth earlier to $300.1 bil-lion, largely reflecting strongaircraft sales at Boeing. A2n U.S. farm incomes are ex-pected to sink this year to afour-year low as record har-vests depress crop prices. A4n China faces a grain glut,with the nation on track for an11th year of bumper crops. C1n Kleiner Perkins has agreedto invest in message serviceSnapchat at a valuation ofclose to $10 billion. B1nBernanke told a court the2008 financial meltdown wasmore severe than the crash thatfueled the Great Depression. A2n Best Buy warned of a thirdstraight year of declining rev-enue, citing weak demand andaggressive competition. B3n Beijing launched an anti-corruption probe into a for-mer and a current executive ata VW China joint venture. B4nChina is probing howMicro-soft distributes its media playerand browser in the country,an antitrust official said. B4n State securities regulatorsare pushing for curbs on cer-tain REITs, saying small in-vestors need protections. C1

Business&Finance

Burger King Worldwide Inc.defended its acquisition of TimHortons Inc. as the hamburgerchain came under criticism forits effort, backed by billionaireinvestor Warren Buffett, to movethe quintessential Americanbrand to Canada.

Burger King on Tuesday an-nounced its roughly $11 billionagreement to buy Tim Hortons,the Canadian coffee-and-doughnutchain. The deal is a so-called inver-sion, as it will move Miami-basedBurger King’s headquarters tolower-tax Canada. It is also struc-tured to shield Burger King hold-ers from capital-gains taxes.

Though many such takeovershave been struck lately in part tominimize taxes—and have beencriticized by legislators and theWhite House for depleting thegovernment’s coffers—executivesof Burger King and its owner, Bra-zilian private-equity firm 3G Capi-tal Management, said the deal isaimed instead at capturing growthopportunities.

The deal put Mr. Buffett in anawkward position, as the 83-year-old billionaire has been apublic advocate of higher taxeson the wealthy. In a 2011 essay,he laid out the case for why thewealthy should pay more intaxes, leading to the so-calledBuffett Rule, a tax-fairness prin-ciple that has been embraced bythe Obama administration.

The Berkshire Hathaway Inc.chairman, who is putting $3 bil-lion into the Burger King deal inthe form of preferred shares,doesn’t consider it an inversion,according to a person familiarwith his thinking. The personsaid Mr. Buffett likely wouldn’t

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BY ANUPREETA DASAND LIZ HOFFMAN

BurgerKing DealDrawsTaxCriticism

Israel and Hamas agreed totheir first open-ended cease-fireafter seven weeks of militaryconfrontation and will resumetruce talks in Cairo in the com-ing days.

Though nine previous cease-fires have come and gone sinceIsrael’s offensive against Hamasbegan on July 8, the latest dealwas greeted in Gaza City withcelebratory gunfire, street cele-brations and honking car horns.

The agreement was reachedjust hours after Israeli warplanes

destroyed one high-rise buildingin Gaza City and severely dam-aged another, marking a shift intactics that observers said esca-lated pressure on Hamas.

Across the border in southernIsrael, the mood was subdued aslast-minute rocket fire ahead ofthe 7 p.m. truce killed two peo-

ple in a border kibbutz andwounded several others.

“I don’t care what the govern-ment says, I don’t care what theHamas says,” said Haim Yellin,the head of the Ehskol regionalcouncil of kibbutzim near theborder. “No one is coming backuntil I know there is a realcease-fire.”

The U.S., which has largelybeen sidelined in talks domi-nated by Israel, Hamas andEgypt, welcomed the truce.

“We fully support today’s

cease-fire agreement, and call onall parties to fully and completelycomply with its terms,” said U.S.Secretary of State John Kerry.“We are all aware that this is anopportunity, not a certainty.”

Prime Minister Benjamin Ne-tanyahu agreed to the cease-firewithout a vote in his securitycabinet, said Yuval Steinitz, Is-rael’s minister for intelligenceand strategic affairs, adding thatseveral ministers oppose it.“There is no confidence here.People are very skeptical,’’ Mr.

Steinitz said. Mr. Netanyahu’s of-fice didn’t comment.

The agreement marks thefirst cease-fire since the currentconflict began last month thatisn’t limited to a set time pe-riod. The longest of the previ-ous nine cease-fires had a termof five days, and all but threetruces broke down beforereaching their full duration.

An Israeli official said Tues-day’s agreement was based onthe same plan that Egypt out-

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By JoshuaMitnickin Tel Aviv

and Asa Fitchin Gaza City

Israel,HamasAgree toNewCease-FireAfterNinePreviousTries,BothSides inGazaConflictReachDeal toPauseFighting;CairoTruceTalksPlanned

WILSTER, Germany—In a sandy marsh on theoutskirts of this medieval hamlet, Germany’s next au-tobahn will soon take shape.

The Stromautobahn, as locals call it, won’t carryAudis and BMW’s, but high-voltage electricity overhundreds of miles of aluminum and steel cablesstretching from the North Sea to Germany’s indus-trial corridor in the south.

The project is the linchpin of Germany’s Energie-wende, or energy revolution, a mammoth, trillion-euro plan to wean the country off nuclear and fossilfuels by midcentury and the top domestic priority ofChancellor Angela Merkel.

But many companies, economists and even Ger-many’s neighbors worry that the enormous cost toreplace a currently working system will underminethe country’s industrial base and weigh on the entireEuropean economy. Germany’s second-quarter GDP

decline of 0.6%, reported earlier this month, put adamper on overall euro-zone growth, leaving it flatfor the quarter.

Average electricity prices for companies havejumped 60% over the past five years because of costspassed along as part of government subsidies of re-newable energy producers. Prices are nowmore thandouble those in the U.S.

“German industry is going to gradually lose itscompetitiveness if this course isn’t reversed soon,”said Kurt Bock, chief executive of BASF SE, theworld’s largest chemical maker.

The European Union has set a series of binding re-newable energy targets for all of its members. Thegoals, in which about 35% of Europe’s electricity isprojected to come from renewable sources by 2020,are considered ambitious by international standards.But Germany’s “lonely revolution,” as some call it,goes much further. By 2025, Germany aims to pro-

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BY MATTHEW KARNITSCHNIG

POWER SWITCH

Germany’s Expensive Energy Gamble

JALAWLA, Iraq—Islamic Stateinsurgents have planted landmines and other explosives to stalla Kurdish push to retake thistown, an unfolding battlefieldstrategy that foes describe as builton patience, the element of sur-prise and a willingness to takelosses.

The fighters borrowed the tac-tic from their predecessors, alQaeda in Iraq, who used impro-vised explosive devices, or IEDs, toprevent U.S. forces from retakingground during the decadelong warthat ended in 2011.

The strategy has proved effec-tive. Last week, Iraqi troops wereslowed by mines planted alonghighways into the city of Tikrit,causing a stalemate in a renewedcounteroffensive against IslamicState fighters there. RepeatedIraqi military attempts to retake

Tikrit, a city of about a quarter ofa million approximately 110 milesnortheast of Baghdad, have failed.

The Sunni militants were lesssuccessful in holding off an offen-sive to recapture the Mosul Dam,despite mining the area heavily. Itslowed the advance of Kurds andother Iraqis, but, backed by Ameri-can airstrikes, they ultimatelypushed the militants out.

From the rooftop of an aban-doned gas station in Jalawla onMonday, a Kurdish officer peeredthrough binoculars at figures dart-ing between a cluster of low-slungbuildings nearby.

“Once we get the command, wewill take the center of the town in12 hours,” said Lt. Col. Bakhtiar

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BY TAMER EL-GHOBASHY

Islamic State FightersAdopt Patient Strategy

Price ShockElectricity prices paid by industry

The Wall Street JournalSource: IHS

*Guangdong ProvinceNote: €1 = $1.32

€150

0

50

100

per megawatt hour

’082007 ’09 ’10 ’11 ’12 ’13

Germany

France

China*

U.S.

Moscow Says Soldiers Ended Up in Ukraine ‘Probably by Accident’

UkranianSe

curitySe

rvice/Re

uters(4)

NEW YORK—Ross Williamsaims to put the bar back into theBard.

His latest Shakes-BEER series in Augusttook thirsty theater-goers to four bars inthe Hell’s Kitchenneighborhood. Ateach stop, actorslaunch into a scenefrom Shakespeareplays, such as “Romeoand Juliet” or “As YouLike It,” often in frontof regulars and tour-ists who have no idea what’s goingon.

At the end of the scene, theShakesBEER crowd moves on to

the next venue. Drink, watch, re-peat.

Mr. Williams calls the project a“roaming Shakespearean perfor-mance,” partly out of necessity.

“Bar owners hearthe word ‘pub crawl’and have the vision ofthousands of Santasthrowing up all over,”he said, referring tothe multi-bar holidaymayhem known asSantaCon.

Mr. Williams, a for-mer actor whofounded his own com-pany, the New York

Shakespeare Exchange, is hardlyalone in redefining the way classi-cal theater is consumed. Alcohol-

PleaseturntopageA8

BY PIA CATTON

All the Bar’s a Stage,And All the Players Are Drunk

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Alcohol-Fueled Shakespeare ProductionsEncourage Participation; Sir Toby Belch

‘Juliet’

ON CAMERA: Ukraine released video interrogations of Russian soldiers it captured. Moscow officials acknowledged a patrol strayed over the border. A5

Chinese Soak UpInvestor Visas

The Wall Street JournalSource: State DepartmentNote: Fiscal year ends Sept. 30

0

2

4

6

8 thousand

’09FY2008 ’10 ’11 ’12 ’13 ’14

85%China

Number of EB-5 visas issuedby the U.S. each year

Annual cap 10,000

FAST TRACK: A surge in Chineseapplicants has put the U.S. oncourse to run out of immigrant-investor visas for the first time.South Korea, India and Mexico,among others, also took part. A3

Franchising is key to BurgerKing and Tim Hortons .............. B1

Heard on the Street: A taxbreak from Canada.................... C14

Refugee crisis swells amidmilitants’ advance........................ A6

U.S. citizen who fought withIslamists is killed in Syria....... A6

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