(FROM THE WALL STREET JOURNAL 8/7/15) 
   By Shayndi Raice and Dana Mattioli 

Companies continue to leave the U.S. through inversion deals, nearly a year after the Treasury Department clamped down on the tax-fueled mergers.

Two U.S. companies Thursday announced plans to move overseas through inversions, bringing the year's tally of proposed inversions to six. A total of 10 inversions, which allow firms to lower their corporate tax rates by buying foreign targets, were done in 2014, according to data provider Dealogic.

CF Industries Holdings Inc., a Deerfield, Ill.-based fertilizer maker, said it would merge with parts of Netherlands-based OCI NV in a deal valued at $6 billion as well as the assumption of $2 billion in debt. Atlanta-based Coca-Cola Enterprises Inc., meanwhile, announced a three-way merger of European bottling operations to create a company with $12 billion in sales.

Both companies will set up new headquarters in the U.K., where the corporate tax rate is around 20%, compared with about 35% in the U.S.

The Treasury Department's assault on inversions last September largely ended a deal-making wave that featured high-profile U.S. companies such as pharmaceutical giant Mylan NV and fast-food chain Burger King Corp. Yet a number of companies have quietly continued to reach smaller inversion deals in industries less likely to attract attention from lawmakers or the U.S. public.

"I think there was some caution around the optics of a large, well-known U.S. company moving to a new domicile and the perception that it was being done as a 'tax dodge,' " said Robert Katz, a partner in Shearman & Sterling LLP's mergers and acquisitions group.

The Treasury's new guidelines made it harder for companies to access overseas cash without having it taxed at U.S. rates, and they tightened the standards for a merger to qualify as an inversion.

While inversion announcements came in quick succession last year, especially among pharmaceutical companies that have large amounts of cash parked overseas, high-profile deals largely dried up late last year and into 2015.

The Treasury's efforts also led to the collapse of some pending inversions, including U.S. pharmaceutical giant AbbVie Inc.'s $54 billion purchase of Ireland's Shire PLC.

But Thursday's announcements show that some U.S. companies are still interested in the deal structure. The difference this time, experts say, is the lower-profile nature of the companies making the moves.

Despite the Treasury guidelines, inversions are still beneficial, lawyers say, even though the tax benefits of the deal may not be as big as they would have been under the old rules.

Other U.S. firms that have announced inversions this year include telecommunications equipment manufacturer Arris Group Inc., medical-device company Cyberonics Inc. and pharmaceutical company Pozen Inc., according to Dealogic.

Those deals stand in contrast to Pfizer Inc.'s unsuccessful attempt to move to the U.K. through a $120 billion purchase of rival AstraZeneca PLC or Burger King's move to Canada through its merger with Tim Hortons. That deal drew the ire of some U.S. lawmakers and consumers.

Still, U.S. corporate giants haven't completely abandoned the inversion. Monsanto Co., the St. Louis-based agricultural firm, is pursuing a $45 billion takeover of Swiss rival Syngenta AG. Monsanto has a strong overseas presence.

The Coca-Cola bottling deal could resolve a historical quirk has kept the headquarters of the European bottling operations in the U.S.

The deal, which will combine Atlanta-based Coca-Cola Enterprises with Coca-Cola Iberian Partners and Germany's Coca-Cola Erfrischungsgetranke AG, is part of a broader move by the U.S. soda giant to consolidate its bottlers around the world and lower costs.

"This is not even remotely a tax-driven transaction. It's a strategic and operational transaction," John Brock, Coca-Cola Enterprises' chief executive, said.

For its part, CF Industries said its deal for parts of OCI offers expansion prospects overseas.

"I would view this as a combination with great industrial logic," said CF Industries CEO Tony Will.

-- Ilan Brat and Mike Esterl

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