Do companies now feel duty-bound to buy their way out of the U.S. tax system?

Medical-device maker Medtronic Inc. (MDT) has become the latest big American business to make a big acquisition driven in large part by the appeal to move corporate headquarters to a more tax-friendly country.

In this case, the Minneapolis-based pacemaker pioneer agreed to buy Covidien PLC (COV), a surgical-products company that started in the U.S. but is formally based in Ireland, for $43 billion in cash and stock.

Medtronic is seeking to undergo this so-called corporate inversion, it says, in order to access foreign-produced cash flows by Covidien, rather than to cut its outright corporate tax rate. Yet Medtronic and dozens of other companies exploring such deals very much have the 35% U.S. tax rate in mind, which they blame for discouraging them from bringing home overseas profits.

As I discuss in the attached video with Yahoo Finance Editor-in-Chief Aaron Task, company boards might very well now view it as their fiduciary duty to entertain such deals. They can save their shareholders large amounts of money that can be used for dividends, buybacks or investment.

Pfizer Inc.’s (PFE) abortive bid for AstraZeneca PLC (AZN) and Omnicom Inc.’s (OMC) abandoned bid for Publicis Groupe were predicated on this tax-arbitrage logic. While both deals fizzled, it was not due to opposition to the tax maneuver. Bourbon-maker Beam Inc. and banana giant Chiquita Brands (CQB) already completed such transactions, and Walgreens Co. (WAG) is considering reincorporating in Switzerland as part of its agreement to merge with Alliance Boots PLC. 

It’s quite likely that investment bankers are flying around the world now looking for companies in tax-friendly jurisdictions that are at least 25% as large as a plausible U.S. acquirer. (The key criterion to qualify for an inversion is that the foreign company's shareholders must receive at least 20% of the stock in the resulting company, meaning an acquisition would be at least 25% the size of the purchasing company.)

Related: How to help struggling workers: Eliminate the corporate income tax?

Before the Medtronic-Covidien link-up was announced, Britain’s Smith & Nephew PLC (SNN) was heavily rumored to be a target of Medtronic. Its shares have surged more than 16% in the past month, and even when the Medtronic chatter was proven false, the stock retained the gains. Already Monday morning, Medtronic rivals Stryker Corp. (SYK) and St. Jude Medical Co. (STJ) were discussed as highly motivated potential buyers now.

Prospects for broad corporate tax reform are remote given the current political realities in Congress -- even more so after House Majority Leader Eric Cantor’s primary loss last week.

Companies (and their boards and lawyers) clearly are taking matters into their own hands by pushing ahead with tax-motivated financial engineering.

There remains the chance that Congress will make a lot of noise about American industry bolting our shores, and there are long-shot proposals to close the inversion provision. Companies try to get the deal done before the path is closed, even if it means absorbing lots of political and PR shrapnel.

The tax imperative creates yet another reason for companies to get busy on the M&A front in this budding “summer of love” for corporate mating.

A hostile bidding war resulted in Hillshire Brands Inc. (HSH) going to Tyson Foods Inc. (TSN); media and cable industries are massively in play as regulators rush to sort things out and just Monday, Level 3Communications Inc. (LVLT) grabbed TW Cable Inc. (TWTC) for $5.7 billion. Sandisk Inc. (SNDK) is buying Fusion IO (FIO) for $1.1 billion and Williams Cos. (WMB) is paying $6 billion to buy out a pipeline joint venture.

Such activity makes it that much less comfortable to be a bear in this environment of cheap debt. Cash-rich companies, stable economies and corporate animal spirits on the rise.