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from Breakingviews:

AbbVie U-turn shows Shire was mostly about tax

By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

AbbVie’s U-turn shows its Shire deal was mostly about tax, after all. Despite initially holding firm as the Obama administration clamped down on tax-driven “inversions,” the American group has now cooled on a $55 billion takeover of its Dublin-based peer. There’s an unwelcome read-across for AstraZeneca.

AbbVie insisted the deal, agreed in July, made sense even after the tax changes in September. The group needs to cut its reliance on Humira, the arthritis drug. A week after the U.S. Treasury got tough, AbbVie Chief Executive Rick Gonzalez said he was more “energised” than ever about the deal.

It’s not clear why AbbVie changed course. The firm’s initial intransigence suggests it thought the clampdown could be circumvented, or left enough room for a workable deal. The volte-face implies it is now bracing for a broader offensive.

from Hugo Dixon:

Italy has no good Plan B

Matteo Renzi’s Plan A is to push through domestic reforms, hope the European Central Bank manages to get inflation ticking up, and keep his fingers crossed the Italian economy stops shrinking. But if this fails, a mega wealth tax, debt restructuring and/or exit from the euro beckons.

There is no Plan B that wouldn’t tip both Italy, where I spent part of last week, and its neighbours into a severe crisis. That makes it all the more important that Plan A works.

from Breakingviews:

Cameron takes deficit amnesia to a new level

By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

David Cameron crowed when UK opposition leader Ed Miliband forgot the deficit in a keynote speech last week. Yet Britain’s prime minister has now taken deficit amnesia to a new level, insisting on the need to tackle the country’s biggest problem while simultaneously pledging a tax giveaway. It’s an electoral bribe he can’t afford.

from Breakingviews:

Behold the unversion: an inversion in all but name

By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Behold the unversion. U.S.-based data protection firm SafeNet may very well be able to slash its tax rate as part of a cross-border deal. Instead of doing so by acquiring an overseas company – a move known as an inversion – it is selling itself for $890 million to Dutch digital security outfit Gemalto. The deal shows the limitations of a possible U.S. government ban on inversions.

from Breakingviews:

Walgreen encounters uncommon inversion boundary

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Walgreen has encountered a limit to inversion logic. The drugstore chain will keep flying the American flag even after agreeing to buy the rest of Swiss-based Alliance Boots for about $15 billion. A backlash against corporate emigration may have affected Walgreen’s decision, but harder numbers probably mattered more.

from Breakingviews:

Japan’s corporate tax cut could harm Abenomics

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Shinzo Abe wants to prove his reform credentials by cutting Japan’s 36 percent corporate tax rate. But the prime minister’s plan could backfire and end up harming his anti-deflation campaign.

from Hugo Dixon:

Is Greece losing its reform drive?

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own. 

Is Greece losing its reform drive? Prime Minister Antonis Samaras has stuck to a harsh fitness programme for two years. But just as it is bearing fruit, he has sidelined some reformers in a reshuffle. There is only one viable path to redemption for Athens: stick to the straight and narrow.

from Breakingviews:

Medtronic-Covidien deal is marriage of convenience

By Jeffrey Goldfarb and Robert Cyran

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The marriage of Medtronic and Covidien looks to be one of convenience. The $42.9 billion deal includes a premium that exceeds the estimated cost savings. Stents and sutures aren’t an obvious fit. And moving Medtronic’s headquarters from Minneapolis to Covidien’s Dublin base won’t obviously cut the U.S. company’s tax bill. Freeing up overseas cash is too shallow a reason to tie the knot.

from Hugo Dixon:

Six solutions for the UK housing crisis

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

Britain’s main economic problem is that the supply of homes isn’t rising nearly as fast as demand. This doesn’t just create the risk of a new housing bubble; young people are finding it increasingly hard to find places to live, especially in crowded London and southeast England. So I make no apologies for returning to the topic after only three weeks.

from The Great Debate UK:

Why Antwerp is under threat as the world’s diamond trading centre

--Vashi Dominguez is the founder of Vashi.com. The opinions expressed are his own.--

When the European Union and the U.S. took action against Russia over the invasion of Crimea and the crisis in Eastern Ukraine, alarm bells immediately rang for the diamond industry. Russia is one of the biggest suppliers ($2.8 billion last year) of rough diamonds for Belgium, through which 80% of all rough diamonds and 50% of all polished stones pass. If Antwerp were to lose access to Russia’s diamonds, it would be the latest in a string of challenges facing the world’s diamond trading centre.

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