Multinationals make routine use of intercompany debt to direct financial flows across subsidiaries and borders in the form of interest, enjoying tax deductibility as a cost rather than being subject to corporation tax like traditional profits and dividends.  In the case of Nestlé’s acquisition of Pfizer’s infant formula business, however, this choice backfired badly.  The Swiss food giant took over the US pharmaceutical group’s global nutrition division in an $11.85 billion deal in 2012. Pfizer was never really interested in the specialist food business that had come with its acquisition of the Wyeth pharmaceutical group three years earlier. A sizeable…

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