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US: Mergers in doubt as White House imposes inversion deals

 |  September 24, 2014

The White House has imposed new rules meant to curb so-called “inversion” deals used by companies to dodge higher tax rates, a move that jeopardizes several pending mergers.

According to reports, the deals that could be most affected by the rule changes including Mylan’s plans to acquire Abbott for $5.3 billion, moving the new company to the Netherlands. AbbVie is set to acquire Shire for $54.7 billion and will move its headquarters to Ireland, while Burger King is set to shift to Canada through its deal with Tim Hortons.

Several other pending acquisitions would also be affected, reports say, in deals including Chiquita, Medtronic, and other pharmaceutical companies.

Such inversion deals, in which a company uses a merger to relocate its tax headquarters for cheaper rates, have come under fire by several officials. The White House’s moves to curb the practice come as the European Commission investigates several recent mergers that have allowed oversees companies to benefit from EU nations’ lower taxes, a move that could be considered illegal state aid.

Full content: Reuters

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