Inversion Deal Crackdown Deflates Health Stocks

Health-care stocks fell en masse in the U.S. and Europe after the U.S. government put out rules designed at blocking cross-border, tax-reducing deals that have helped drive a record period of industry mergers and rewarded investors.

The deals have been led by U.S. companies seeking to avoid the developed world’s highest corporate tax rate by buying foreign businesses and moving their tax address abroad. The U.S. Treasury rules, released last night, seek to slow or halt those transactions, or at least make them less profitable as a way of keeping the companies headquartered in the U.S.