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Ernst & Young and Simmons & Simmons are advising Wal-Mart Stores Inc, the world's largest retailer, on its £6.7 billion (S10.8 billion) bid for UK supermarket group Asda.

New York firm Kramer, Levin, Naftalis & Frankel is advising Bermuda company Tyco on its acquisition of Raychem. Tyco is the world's biggest underwater communications firm, and Raychem designs, manufactures, and distributes electronic components. Tyco will pay $1.4billion in cash and will issue 16 million new shares based on the remainder of the Raychem shares.

Weil Gotshal & Manges is advising Hicks Muse Tate & Furst on its £822 million ($1.3 billion)bid for UK foods comapny Hillsdown Holdings. Hillsdown's brands include Typhoo tea, Cadbury's biscuits and HP canned foods.

McDermott Will & Emery is advising RAG International Mining on its acquisition of Cyprus Amax coal company. The deal is valued at $1.1 billion in cash and debt. Cyprus Amax Coal is one of the biggest coal mining companies in the US and has properties in Pennsylvania, Wyoming, Utah, Colorado and Illinois. RAG is a subsidiary of the German energy and technology company RAG Aktiengesellschaft.

The Australian government has passed a goods and services tax (GST) deal which may place an additional compliance burden on business.

In 1994, the Dutch Supreme Court ruled that a UK person legally entitled to receive dividends from a Dutch company could claim reduced Dutch dividend withholding tax of 15% under the UK/Netherlands tax treaty. The case in question involved a Luxembourg company that sold Shell dividend coupons to a UK market maker at 80% of their nominal value. Since the Luxembourg company was not entitled to the benefits of a tax treaty, it would otherwise have suffered 25% dividend withholding tax on dividends it received from Shell in the Netherlands.

Cravath Swaine & Moore is advising MCI WorldCom, the US's second-largest communications company on its acquisition of SkyTel, the wireless communications company. MCI will pay $1.8 billion for the company. The purchase will be made in stock and includes assumption of debt. The two companies have had business arrangements with each other for some time, and MCI WorldCom is the largest reseller of SkyTel services.

The original issue in the Parthenon case was the deductibility of interest on a promissory note distributed as a dividend. The Tax Court of Canada found it was not deductible, because the Canadian statutory interest deduction is limited to interest borrowed money and balance of sale of property, and this indebtedness fits neither category.

In a busy spring, the IRS has ruled on issues such as transfers of foreign stock and product grouping, and the courts have spoken on attorney-client privilege. Hal Hicks, David Benson and Marjorie Rollinson of Ernst & Young, Washington report on the latest developements

A tax reform in the UK Finance Bill threatens to harm the Eurobond market, lawyers are complaining. The Bill aims to close a loophole in the tax treatment of bonds redeemable at a premium over their issue price, but the lawyers worry that the reform extends beyond the loophole and will harm the tax treatment of standard bonds. The move comes while the UK government continues to campaign against the proposed EU withholding tax because of its claimed threat to the bond markets.