WRAPUP 1-Shares of 'inversion' candidates slide on U.S. tax rule

Tue Sep 23, 2014 12:21pm EDT
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* U.S. moves against tax-avoidance "inversion" deals

* Burger King-Tim Horton deal to proceed

* Action may deter Pfizer from returning to bid for AstraZeneca

By Ben Hirschler and Dan Burns

LONDON/NEW YORK, Sept 23 (Reuters) - The U.S. Treasury's move to curb deals that allow U.S. companies to escape high taxes at home wiped a combined $12.3 billion off the shares of nearly a dozen companies on both sides of the Atlantic on Tuesday, as investors reacted to the surprisingly far-reaching action.

But it was unclear whether the tougher stance adopted by the Obama administration on "inversion" deals that allow companies to escape high U.S. taxes by reincorporating abroad, which followed a wave of public criticism, would end any of the handful of deals currently in the works.

Burger King, which is in the process of an inversion deal with Canada's Tim Horton's, said Tuesday it would proceed with its $11.5 billion deal despite the Treasury actions, saying the transaction was not about the tax benefits.

Nonetheless, the shares of some companies involved in or interested in merger deals were dealt strong blows. In London, AstraZeneca slid 3.6 percent, while Shire fell 2.5 percent.

The U.S. Treasury move was seen as adding some risk around the deal for AbbVie to buy Shire for $55 billion and might deter Pfizer from making another attempt to acquire AstraZeneca, after a $118 billion takeover attempt failed in May.   Continued...