Irish-based M&A surges on back of U.S. companies' tax inversion deals

DUBLIN Wed Jul 9, 2014 1:43pm EDT

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DUBLIN (Reuters) - The surge in overseas mergers and acquisitions by U.S. companies looking to lower their tax bills led to a near six-fold rise in the value of deals in Ireland in the first half of the year, accounting for almost 20 percent of all European transactions.

American lawmakers have expressed concern about U.S. companies buying overseas businesses to shift their tax domiciles to countries such as Ireland and Switzerland, where these so-called inversion deals are becoming increasingly commonplace.

Medtronic Inc's $42.9 billion takeover of Irish-domiciled Covidien and Dublin-headquartered Actavis's $25 billion acquisition of Forest Laboratories pushed the total value of deals announced in the first six months to 97.4 billion euros ($132.8 billion).

That compared with 14.8 billion euros in the same period last year and was the highest half-year total recorded in Ireland since data was first collected in 1993, said information services company Experian after publishing the collated figures on Wednesday.

While the value of transactions soared, the total number rose to 147 from 124 a year ago, meaning that Ireland represented about 3.3 percent of the total volume of European deals and 17.7 percent in value terms, Experian said.

"The figures from the first six months of 2014 make welcome reading for Irish dealmakers, with a substantial upturn in both the volume and, in particular, the value of M&A deals," said Declan Murphy, commercial director at Experian Ireland.

In a windfall for local law firms, the figures showed that Ireland's Arthur Cox acted as legal advisers on deals worth 56 billion euros, the highest value of any law firm, while rival A&L Goodbody was involved in deals worth 33 billion euros.

Morgan Stanley was financial adviser on 53 billion euros worth of deals, heading a top 10 that also included Citigroup, Goldman Sachs and Bank of America Merrill Lynch .

The pace of deals at least partly struck for tax reasons has continued into July.

AbbVie raised its offer for Irish-domiciled Shire overnight and Swiss-listed Cosmo Pharmaceuticals said on Wednesday that it would merge its Irish subsidiary with Salix Pharmaceuticals.

($1 = 0.7331 Euros)

(Reporting by Padraic Halpin; Editing by David Goodman)

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