NEW YORK: The Obama administration has imposed new rules, effective immediately, meant to curb "inversion" deals. A handful of companies in the midst of completing such tax-avoiding transactions are potentially affected. Here is a list of pending inversions that may be complicated by the new rules:
* Mylan Inc , a generic drugmaker based in Pennsylvania, plans to pay $5.3 billion to acquire a chunk of Abbott Laboratories' non-U.S. business. The tax home of the new company would be the Netherlands. Mylan says this move will reduce its global tax rate to about 21 percent from 25 percent in year one and into the teens later, according to a regulatory filing. Mylan has said it expects to close the transaction in the first quarter of 2015.
* U.S. drugmaker AbbVie agreed to pay $54.7 billion in July for Dublin-based Shire Plc . It not only will give AbbVie a slice of the market for treating rare diseases, it also will give the company a UK tax residency, cutting its tax rate by 2016 to 13 percent from 22 percent, according to a filing. AbbVie would have to pay more than $1.5 billion in termination fees to Shire if the deal does not close. It was expected to be completed by the fourth quarter of 2014.
* Fast-food chain Burger King Worldwide Inc said Tuesday that it is "moving forward as planned" in a deal with Canadian coffee and doughnut seller Tim Hortons , despite the Treasury's actions. The $11.5 billion merger will relocate the home of the Whopper's tax headquarters to Canada.
* Applied Materials Inc , a California-based maker of chip equipment, announced plans in September 2013 to acquire a smaller Japanese rival, Tokyo Electron Ltd <8035.T>, in an all-stock deal worth $10 billion at the time of the announcement. The companies said they expect to close the deal by the end of 2014 - unless Applied Materials cancels and is forced to pay a $400 million termination fee. The new entity, to be known as Eteris, will incorporate in the Netherlands.
* Chiquita Brands International Inc , the Charlotte, North Carolina-based food producer, will become the world's largest banana supplier - as well as a tax inverter - if its $7 billion deal with Ireland's Fyffes receives regulatory approval from the European Union. The EU extended its deadline for a decision to Oct. 3 from Sept. 19. However, Brazilian juice maker Cutrale and financial conglomerate Safra Group have expressed interest in a joint takeover of Chiquita, which may complicate the Fyffes deal.
* U.S. medical technology group Medtronic Inc is working to close a $42.9 billion deal with Ireland's Covidien Plc by the end of this year or early 2015. Reneging on the deal would cost Medtronic an $850 million termination fee. "We are studying Treasury's actions," Medtronic spokesman Fernando Vivanco told Reuters on Monday. "We will release our perspective on any potential impact on our pending acquisition of Covidien following our complete review."
* Inversions by two U.S. drugmakers that are expected to close in the fourth quarter of this year may also be affected by Treasury's announcement. Pennsylvania's Auxilium Pharmaceuticals plans to pay $346 million in stock to buy Canadian eye drugmaker QLT Inc and relocate to British Columbia. It would cost Auxilium $28.4 million if it cancels the agreement. Meanwhile, Salix Pharmaceuticals will move its tax base to Ireland if a deal to buy the Irish arm of Italy's Cosmo Pharmaceuticals SpA closes - although some of Salix's top investors oppose the deal, Reuters reported. The price tag for breaking the deal? $25 million.
* Oilfield services company C&J Energy Services Inc may move its tax base offshore in a deal with Nabors Industries Ltd in Bermuda. While the $2.86 billion deal is expected to close by the end of 2014, C&J Energy Services would have to pay up $65 million if the deal falls through.- Reuters
