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UK brewer Bass has disposed of Coral Bookmakers to fellow bookmakers Ladbrokes. The deal is worth approximately £375.5 million ($604 million). Bass was advised by tax partner Charles Hellier at Linklaters in London.

US chemical group Hercules has made a hostile bid for US chemicals company Allied Colloids, a UK producer of water-treatment chemicals. The deal is valued at $1.8 billion.

In 1997, a number of high-profile tax advisers made a bid for professional independence by setting up their own tax boutiques. Can these firms survive without the support of a large law or accounting firm network? Phillippa Cannon reports

From: Jefferson VanderWolk

Tax reform in Switzerland has revitalized the Swiss holding company regime. Peter Riedweg of Homburger Rechtsanwälte, Zurich looks at some of the regime’s new features, which include a capital gains tax exemption for qualifying participations

The IRS has announced that it will not appeal against the US Tax Court's decision in the SDI Netherlands BV v Commissioner case. The court found that royalty payments made by the taxpayer for the use of software in the US, to a related company in Bermuda did not qualify as US source income. The finding was based on the fact that the royalty payments from SDI USA passed through SDI Netherlands before they reached the Bermuda company.

MascoTech is set to merge with TriMas Corporation, a manufacturer of industrial products. The transaction is valued at approximately $900 million. MascoTech already owns 37% of TriMas. The merged organization will have a combined sales volume of $1.6 billion.

Reed Elsevier is to dispose of its consumer magazine group IPC in a deal worth £860 million ($1.38 billion). The purchasing MBO group is financed by Cinven, with debt underwritten by Goldman Sachs. Freshfields acted for Reed Elsevier, with tax advice from partner Colin Hargreaves and manager Isabel de May.

The US Internal Revenue Service (IRS) announced on January 16 1998 that it will clamp down on the use of hybrid branches that simultaneously reduce foreign tax and defer US tax. A number of US power companies engaged in overseas power projects use these entities. Offshore holding companies are formed for foreign investment, and the payment of US tax is deferred until earnings have been repatriated to the US. Since January 1997, US companies could check the box to ensure that foreign entities, with a single owner, were treated as transparent for US tax purposes.

Japan's government has proposed extensive tax cuts to boost economic growth, against a background of bankrupt banks and securities houses. The package, announced in December 1997, includes cuts of ¥2 trillion ($15 billion) in income tax, and ¥840 billion in corporation tax (for related coverage, see this issue, page 48). Announcing the cuts, prime minister Hashimoto said Japan would not be responsible for pushing the global economy into recession. The package is expected to be adopted in the Japanese parliament, yet has been criticized for being inadequate and misdirected.