Inversion Crackdown Has Side Effects

The Treasury Department's clampdown on tax inversions could give a Chinese buyer a leg-up in an ongoing bidding war for a major U.S. cranemaker.

Last August, Terex, an equipment manufacturer based in Westport, Connecticut, agreed to merge with European rival Konecranes. The transaction was structured as an all-stock inversion that would have incorporated Terex in Konecrane's home country of Finland, where tax rates are lower. But the deal was disrupted in January when a Chinese construction-equipment maker, Zoomlion, launched a competing bid.

Both deals had their trouble spots. Zoomlion's bid is higher and it's all-cash. But it comes with strings -- including a more-contentious regulatory review and a less-certain future, as the buyer grapples with an ugly profit slump, piles of unpaid bills and lots of debt. The Konecranes combination was supposed to be politically -- and perhaps operationally -- preferable.