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Another U.S. tax ‘inversion’ implodes, pending deals dwindle

(Reuters) – Another proposed U.S. corporate tax “inversion” deal collapsed on Friday when Irish food group Fyffes Plc and larger U.S. rival Chiquita Brands International Inc called off an agreement to combine.

It was the fourth such deal to unravel since the Treasury Department on Sept. 22 cracked down on inversions, deals in which a U.S. company acquires or sets up a company in a foreign country and adopts its nationality for tax purposes. [ID:nL2N0RN29G]

Designed to reduce a U.S. corporation’s overall tax burden, the deals are seen as a threat to the U.S. corporate tax base and have been sharply criticized by the Obama administration.

Here is the status, as of Friday, of other, uncompleted inversion transactions announced before Treasury’s new rules:

> U.S. drugmaker AbbVie Inc on Oct. 20 dropped a $55 billion inversion bid for Irish competitor Shire Plc.

> Auxilium Pharmaceuticals Inc on Oct. 9 canceled an inversion. Salix Pharmaceuticals Ltd did the same on Oct. 3.

> Applied Materials Inc. The chipmaker has agreed to buy smaller Japanese rival Tokyo Electron Ltd, with the deal expected to close this year. Plans are for the new entity, to be known as Eteris, to incorporate in the Netherlands.

> Burger King Worldwide Inc has said it is “moving forward as planned” to acquire Canadian coffee and doughnut chain Tim Hortons Inc and relocate the tax home of the fast-food chain’s Whopper sandwich to Canada.

> C&J Energy Services Inc, an oilfield company, agreed to redomicile to Bermuda via a deal with Nabors Industries Ltd. Closing was expected by the end of 2014.

> Medical technology company Medtronic Inc is working to close a $43 billion purchase of Ireland’s Covidien Plc by late 2014 or early 2015. The deal was refinanced after Treasury’s new rules came out. Medtronic has sought EU approval for the transaction, with competition authorities setting a Nov. 14 deadline for a decision.

> Drugmaker Mylan Inc agreed to buy a piece of Abbott Laboratories’ non-U.S. business, with plans to put the new combined company’s tax domicile in the Netherlands. The two companies on Oct. 22 tweaked financial aspects of their deal and said they would proceed with it.

These tax inversion announcements were made after the Treasury Department released the new rules:

> Steris Corp offered to buy Britain’s Synergy Health Plc in a deal that would shift Steris’ tax domicile to Britain.

> Houston-based oilfield housing supplier Civeo Corp said it will redomicile to Canada for tax purposes.

(Compiled by Kevin Drawbaugh in Washington)