Tax-Saving Mergers Go From Hot to Not

One target of President Donald Trump's tax reform plan (scant on details as it is) is the corporate inversion, a tactic companies use to lower their obligations to the U.S. government by shifting their headquarters overseas. That's sort of like coming up with a plan to make dinosaurs extinct. One of this week's biggest deals explains why.

Vantiv Inc., based outside of Cincinnati, agreed on Wednesday to acquire its U.K.-based payments rival Worldpay Group Plc for about $10.4 billion. The two companies are the right size to pull off a deal that would have placed the combined entity's legal home base in an overseas country where tax rates are lower, but they decided to keep a U.S. domicile, noting that an inversion "might not offer significant value enhancement." This is a stark reversal from not too long ago when one of, if not the, selling point for foreign targets was the ability to reap tax savings. It's perhaps even more notable given that Vantiv could have used some help to offset the expensive price tag.