M&A Breakup Risk Elevated on Potential Tax Legislation: Citi
2014-08-07 09:22:36.887 GMT
By Sam Chambers
Aug. 7 (Bloomberg) -- The U.S. Treasury will probably firm
up its proposals to curb tax benefits of corporate inversion
deals in the S/T and enact legislation by year end, Citi says
after a call with a legal expert.
* Citi: U.S. may seek to place limits on the uses of offshore
cash and the deductibility of interest expenses incurred to
fund overseas operations
* Cos. may expedite pending deals; regulation would
increase break-up risk of deals involving significant
amounts of offshore cash, such as Covidien/Medtronic
* In pharma, Citi prefers Actavis and Teva, due to their
greater focus on organic growth
* NOTE: Yday Deutsche Bank said the probability of legislative
action on inversions this year is very low
* NOTE: Walgreen/Alliance Boots to be based in the U.S.
* NOTE: Yday AstraZeneca, Shire fell after the Treasury said
it was examining whether it had the authority to bypass
Congress and curb corporate inversions
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To contact the reporter on this story:
Sam Chambers in London at +44-20-7673-2021 or
schambers7@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Gaurav Panchal
2014-08-07 09:22:36.887 GMT
By Sam Chambers
Aug. 7 (Bloomberg) -- The U.S. Treasury will probably firm
up its proposals to curb tax benefits of corporate inversion
deals in the S/T and enact legislation by year end, Citi says
after a call with a legal expert.
* Citi: U.S. may seek to place limits on the uses of offshore
cash and the deductibility of interest expenses incurred to
fund overseas operations
* Cos. may expedite pending deals; regulation would
increase break-up risk of deals involving significant
amounts of offshore cash, such as Covidien/Medtronic
* In pharma, Citi prefers Actavis and Teva, due to their
greater focus on organic growth
* NOTE: Yday Deutsche Bank said the probability of legislative
action on inversions this year is very low
* NOTE: Walgreen/Alliance Boots to be based in the U.S.
* NOTE: Yday AstraZeneca, Shire fell after the Treasury said
it was examining whether it had the authority to bypass
Congress and curb corporate inversions
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Sam Chambers in London at +44-20-7673-2021 or
schambers7@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Gaurav Panchal