If New York-based Pfizer Inc. is successful in its $98.7 billion takeover of London-based AstraZeneca P.L.C., there is one big potential loser: the U.S. Treasury.

Pfizer executives said AstraZeneca management rejected an initial bid in January, but Pfizer renewed its offer Saturday due to "recent market developments" - the spate of news about other potential deals last week.

Under Pfizer's proposal, the combined company would be owned by a new U.K. parent. That doesn't mean any of Pfizer's executives would need to move abroad: CEO Ian Read has said the drugmaker would be run from the United States.

It does mean, however, that Pfizer is joining a wave of U.S. companies using mergers to slash income tax bills by shifting their head office overseas - often on paper only.

"This is basically an opportunity to go outside the U.S. and still sell in the U.S. and strip the tax base," said H. David Rosenbloom, director of the international tax program at New York University's school of law.

U.S. law seeks to stop companies from avoiding income taxes by simply ditching their home residence. Those rules only prevent companies from getting the tax benefit of an overseas merger if their existing shareholders still own 80 percent or more of the company's stock after the deal.

In Pfizer's case, shareholders likely would own less than that proportion of the new combined company.

By switching its parent company from the U.S. to the United Kingdom, Pfizer could take advantage of a number of tax benefits. The U.K. corporate tax rate is 21 percent - next year dropping to 20 percent - compared with 35 percent in the U.S. In addition, the U.K. only taxes profits that companies say are earned within the country.

So earnings attributed to subsidiaries in tax havens aren't taxed when they are brought home. And the newest benefit: The U.K. is phasing in a 10 percent tax rate on profits attributed to U.K. patents, a big source of income for any drugmaker.

"The way we're structuring this is, it's fully compliant with the appropriate laws," Read told analysts Monday. "It's in my future responsibility to maximum return to shareholders, and I don't actually see that is a conflict with the interest of the U.S. government."

Last year, Pfizer reported an effective tax rate of 27 percent.

Congress tried to impose a moratorium on such corporate moves overseas - called inversions - in 2002. Two years later, it passed legislation designed to limit that practice.

Nevertheless, since 2012, at least 15 large companies have either moved or announced plans to move offshore, including Chiquita Brands International Inc., and New York-based Omnicom Group Inc., the largest U.S. advertising firm.