July 16, 2014 by Arezu Sarvestani
Lawmakers aim to prohibit companies from shifting their headquarters overseas in order to evade U.S. taxes, a measure that would apply retroactively to deals such as Medtronic’s $43 billion acquisition of Covidien.
The White House is looking to clamp down on companies that relocate their headquarters overseas in order to benefit from lower tax rates, a measure that could have implications forMedtronic’s (NYSE:MDT) $43 billion mega-merger withCovidien (NYSE:COV).
Part of the Medtronic-Covidien deal includes shifting Medtronic’s official headquarters from Minnesota to Covidien’s base in Ireland, allowing Medtronic to take advantage of the country’s more favorable corporate tax rate in a move called a corporate inversion.
