Dow, DuPont eye big tax savings in rare merger of equals

New York

THE tax-free treatment of the spin-offs Dow Chemical Co and DuPont plan to carry out after they merge their businesses is a prime driver of the deal, potentially saving tens of billions of dollars, industry sources said.

The US$120 billion merger, announced last week, comes less than a month after drug maker Pfizer Inc said it would use its US$160 billion acquisition of Allergan Plc as a way to cut its taxes. It underscores the growing use of mergers and acquisitions as a way to slash corporate America's tax bill.