US has long tried to block tax inversions - with success
US authorities have grappled for more than 30 years with corporate deals known as inversions by which American companies shift their tax domiciles abroad to avoid US taxes.
Fifty-two substantial deals like this have occurred since 1983, about half of them since the 2008-2009 credit crisis.
Throughout that time the US government has tried various methods to manage the exodus, with mixed succcess.
The first inversion in 1983 by Mcdermott International was followed a year later by two new rules from the US Internal Revenue Service. No more big inversions followed for more than a decade.
In the mid-1990s, the deals resumed, typically with US corporations setting up smaller companies in Bermuda or the Cayman Islands. Many energy and insurance companies did this.
In these inversions, the new island tax haven company would become the parent of the US business, though core operations stayed in the United States. The name "inversion" came from the idea of turning the company upside down, making the offshore company the head and US operations the body.
US companies were able to book foreign profits at low or no taxes abroad, putting them out of the reach of the US Internal Revenue Service.
The strategy made other legal tax-avoidance moves easier, such as US earnings stripping. That involves a foreign parent lending to a US unit, which deducts interest payments to make its US income smaller for tax purposes, while the foreign parent books interest income at its home country's lower tax rate.
The US Treasury Department expressed concern about the deals in 2002. Congress in 2004 adopted Section 7874 of the tax code. It set two tests of whether an inverted company would be treated as foreign or domestic by the US government.
First, if the original US company's investors still held 80pc or more of the new foreign parent's shares, the new parent would be treated as US, not foreign.
Second, the same treatment would apply if the new company had no "substantial business activities" in its home country.
After these rules were adopted, the deals dried up again. Until recently.
Since 2008, there has been a wave of deals. In these deals the new foreign parent tends to be in Canada, Ireland, Britain and the Netherlands.
They are structured to take advantage of a part of the law that said if the original US shareholders own 60pc to 80pc of the new, foreign parent, it can be treated as a foreign entity, but with some restrictions.
Over the past four years, US President Barack Obama has consistently called for tighter rules that would again restrict the shifting of US companies off shore.
While several bills have been filed by Democratic politicians, Congress has taken no major action on inversions in many years.