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As news of a merger between Burger King and Tim Hortons is confirmed, you鈥檙e probably wondering what the deal really means for your daily double-double fix. Here is the breakdown of what could be a sweet deal for Canada鈥檚 beloved coffee chain.

How would merging with Burger King help Tim Hortons?

The deal means Tims鈥� coffee and products will have much wider distribution in the U.S., analysts say.

Kevin O鈥橪eary, chairman of the O鈥橪eary Financial Group and host of CTV2鈥檚 鈥淪hark Tank,鈥� said Tim Hortons has struggled to compete with popular U.S. coffee chains like Dunkin鈥� Donuts since it opened a limited number of stores across the border. Burger King could change all that by serving Tim Hortons coffee across America, O鈥橪eary told 麻豆影视 Channel Monday.

On Tuesday, a joint statement from the two companies said that although they will be managed independently, each will benefit from the other鈥檚 鈥渂est practices鈥� to increase their global presence.

Does this mean Tim Hortons will be selling burgers?

As for changes at Canadian Tim Hortons locations, don鈥檛 fret. You won鈥檛 be seeing any bizarre burger-doughnut crossovers or pop-flavoured coffee 鈥� at least for the time being.

鈥淚 don鈥檛 think we鈥檒l see any immediate changes to Tim Hortons,鈥� Bryan Borzykowski, an independent business journalist, told 麻豆影视 Channel.

鈥淵ou鈥檒l still be able to get your double-double, there鈥檚 no worry about that. And that for sure will not go away because that鈥檚 what people love about Tim Hortons.鈥�

Indeed, the joint statement said the deal 鈥渨ill not change the way Tim Hortons works with its franchisees or its business model.鈥�

Tim Hortons president and CEO Marc Caira said Tuesday that the company鈥檚 core market 鈥渉as been, will be, will continue to be Canada.鈥�

What is behind this deal?

Before the deal was confirmed, many analysts said that Burger King鈥檚 main goal was to reduce its corporate tax bill by moving headquarters to Canada. 

Retail expert Jason Dubroy said the corporate tax rate in the U.S. is 35 per cent, 鈥渢he highest tax rate from a corporate perspective anywhere in the industrial world.鈥�

In Canada, the baseline rate is much lower at 15 per cent.

Burger King would save money in what鈥檚 known as a tax inversion, an 鈥渋ncreasingly common manoeuvre鈥� for U.S.-based companies, Dubroy said.

But Burger King executives denied Tuesday that this is a 鈥渢ax-driven deal.鈥�

Burger King CEO Daniel Schwartz said both companies will continue to pay taxes in their respective countries. Even though the new, post-merger company will be based in Canada, Burger King鈥檚 headquarters will remain in Miami and continue to pay U.S. federal, state and city taxes on the company鈥檚 U.S. income, Schwartz said.

Burger King chairman and managing partner at 3G Capital, Alex Behring, said the company鈥檚 current tax rate is in the mid-20 per cent range, which is in line with Canada鈥檚 corporate tax rate.

鈥淲e don鈥檛 expect there to be meaningful tax savings, nor do we expect there to be a meaningful change in our tax rate,鈥� Schwartz said.

What exactly is tax inversion?

A tax inversion allows a U.S. company to reorganize in a country with a lower tax rate by acquiring or merging with a company there. The move allows money earned outside the U.S. to be transferred to the parent company without paying additional U.S. taxes.

U.S. President Barack Obama is not pleased with the tax inversion process, but it is perfectly legal, Dubroy said. U.S. lawmakers haven鈥檛 yet figured out whether to impose penalties on companies that seek tax breaks abroad, he added.

So there鈥檚 more to the deal than tax savings?

Yes.

Although the federal corporate tax rate in Canada is 鈥渧ery attractive,鈥� U.S. companies still face 鈥渢he burden of provincial taxes,鈥� especially if they relocate to Ontario, O鈥橪eary said Monday.

The Burger King-Tim Hortons deal is also largely driven by the fact that both companies have 鈥渁 significant challenge in growth,鈥� said O鈥橪eary, who is a Tim Hortons shareholder.

鈥淲e鈥檙e not growing,鈥� he said. Tim Hortons stores are everywhere in Canada, and it has been difficult to add new locations, he added.

O鈥橪eary said the deal will be mutually beneficial for both companies, which can learn from each other鈥檚 successes and failures.

With files from Andrea Janus and The Canadian Press