Swiss-listed Cosmo Pharmaceuticals said it would merge its Irish subsidiary with US firm Salix Pharmaceuticals.

The move is the latest in a wave of overseas deal-making by US companies looking to lower their tax bill. 

US lawmakers have expressed concern about American corporations shifting tax domiciles abroad, particularly to Ireland, Switzerland and elsewhere in Europe, to avoid taxes. 

These deals, known as inversions, are still rare but rapidly becoming more commonplace.

High-profile mergers such as Medtronic and Irish-based Covidien, Pfizer's failed $118 billion bid for British rival AstraZeneca last month and - most recently - AbbVie's takeover bid for Shire are deals that are driven at least in part by tax considerations. 

Shareholders of Salix, which is based in North Carolina, are expected to own nearly 80% of a jointly-held Irish unit following a stock swap with the parent company. 

The deal will add "modestly" to earnings per share from 2016 and more sharply thereafter, the company said. 

"This establishes tax efficient corporate structure and increases Salix's competitive positioning for future mergers-and acquisitions and product licensing efforts," the American company said in a statement today. 

Cosmo, which turned a profit of €68.7m last year, will maintain just over 20% of the combined Irish unit. 

For Cosmo shareholders, the deal effectively means owning 20% of Salix, worth $8.7 billion at current market prices, as well as tapping into future cash flow. 

Dealers in Zurich said Cosmo shares were also gaining on the unwinding of an agreement with Valeant Pharmaceuticals over an experimental acne treatment, though the Canadian firm would still have right of first refusal should the drug be licensed out. 

Salix shareholders will receive one share of the combined subsidiary for each Salix share they currently own through the deal, which is expected to close in the fourth quarter. 

The transaction cements ties between Salix and Cosmo, an Italian firm best known for two drugs to treat ulcerative colitis, a chronic disease that causes inflammation and sores in the lining of the large intestine.

Last year, Cosmo's profits were driven by selling a financial investment in Santarus, bought in November by Salix for about $2.6 billion.