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Imperial Tobacco has acquired the Douwe Egberts Van Nelle tobacco business from the Sara Lee group for £652 million ($1billion).

British Gas has completed the sale of its Pipeline Integrity International business to companies formed by Mercury Asset Management Private Equity for £90 million ($147 million). Pipeline Integrity International provides high resolution inspection and maintenance services for oil, gas and chemical pipelines. It works in more than 30 companies.

Citicorp and Travelers Group are to merge in a transaction worth $166 billion, which will create the world's largest financial services company. The new company will be called Citigroup Inc. The deal calls for Citicorp shareholders to exchange each of their shares for 2.5 shares of Citigroup in a tax-free exchange. Travelers shareholders will retain their existing shares. The shareholders of each company will own 50% of the combined enterprise.

US banks Banc One and First Chicago NBD have agreed to a merger valued at $72 billion.

Bowater, the US paper products group, has offered $3.5 billion to buy Avenor, the Canadian forest products manufacturer.

The US Internal Revenue Code section 6031(e) exempts foreign partnerships that have no income from US sources, or are effectively connected with a US trade or business, from filing a partnership tax return even if they have US partners. This little-noticed provision of the Taxpayer Relief Act 1997 (TRA 1997) was intended to bring to an end years of uncertainty about the US filing obligations of foreign partnerships. Proposed regulations issued on January 23 1998 expand the filing exemption and provide other filing reliefs to foreign partnerships.

In late 1997, the tax authorities released a new directive clarifying their views on the value-added tax (VAT) treatment of telecommunications and tele-services. As expected, the directive provides that tele-services are not identical to telecoms services, and hence are potentially subject to different VAT treatment.

Spanish tax legislation provides for various territorially-based special tax regimes, which in practice produce variations in the Spanish general tax regime. These special tax regimes, whose origins lie in historical considerations recognized and protected by the Spanish Constitution, specifically apply in the Basque Country's Ancient Territories (ie Alava, Guipúzcoa and Vizcaya) and in the Navarre Autonomous Community.

Import exemptions relating to customs duty and value-added tax (VAT) were reintroduced on January 1 1998, following their abolition in April 1996. However, only a relatively small group of foreign investors will now qualify for the exemptions.

A new decision on "turbo funds" sheds new light on the scope of the sham transaction procedure, as well as on the way the 80% penalty attached should apply (Tribunal Administratif d'Orleans – 1ère Chambre, December 9 1997 – req no 95-1535 – Société SDMO)