Five Of The Biggest Tax Inversion Deals

U.S.-based Burger King Worldwide Inc. (NYSE:BKW) said Monday it’s considering a merger with Canadian-headquartered Tim Hortons Inc. (NYSE:THI) to create the world’s third-largest quick-service restaurant chain. The deal would be structured as a so-called tax inversion, which would move the combined company’s home base to Canada and result in a lower corporate tax rate.

The U.S. has one of the world’s highest corporate tax rates, at about 35 percent. By comparison, Canada’s rate is closer to 30 percent.

Note: The effective corporate tax rate is defined as statutory rate plus average state (subcentral) tax rate.

Source: Organization for Economic Cooperation and Development, or OECD, June 2014

According to Wells Fargo’s Wealth Management Insights:

Over 40 public U.S. companies have become so-called ‘expatriated entities’ following a tax inversion since 1998. Changes in U.S. tax law caused a slowdown in the number of inversions following the enactment of the American Jobs Creation Act of 2004, but they have since rebounded considerably.

Here are five of the biggest tax-inversion deals this year, as noted by Forbes:

-- U.S. drug company AbbVie Inc.’s (NYSE:ABBV) planned $54 billion acquisition of Ireland’s Shire PLC (NASDAQ:SHPG), with headquarters in the U.K.

-- Ireland’s drug company Mallinckrodt PLC’s (NYSE:MNK) acquisition of Cadence Pharmaceuticals Inc., with headquarters in Ireland.

-- Ireland’s drug company Actavis PLC’s acquisition of Forest Laboratories Inc., with headquarters in Ireland.

-- U.S. medical-device company Medtronic Inc.’s (NYSE:MDT) planned acquisition of Ireland’s Covidien PLC (NYSE:COV), with headquarters in Ireland.

-- U.S. snack-manufacturing company Mondelez International Inc.’s (NASDAQ:MDLZ) planned merger of its coffee business with that of Holland’s D.E. Master Blenders, with headquarters in the Netherlands.