2011 2012 2013 2014

18 | FORBES SEPTEMBER 29, 2014

LeaderBoard
JAZZ PHARMACEUTICALS, 79%
AZUR PHARMA, IRELAND
BEFORE 40%; AFTER 25%
ALKERMES, 75%
ELAN DRUG TECHNOLOGIES,
IRELAND
BEFORE 26%; AFTER 18%
With its new tax home,
antipsychotic-drug maker
Alkermes is itself a tempting
inversion target.
TRONOX, 62%
EXXARO MINERAL SANDS
OPERATIONS, AUSTRALIA
Pigmentmaker Tronox secured
a new tax home in Australia by
buying the mineral sands unit of
South Africas Exxaro.
TOWER GROUP, <80%
CANOPIUS HOLDINGS
BERMUDA, BERMUDA
Since announcing plans to
invert, Towers stock has
fallen from nearly $18 to $2
amid widening losses, an SEC
investigation and a planned
buyout by insurer ACP Re at
a price that has dropped to
$2.50 a share.
LIBERTY GLOBAL, 64%
VIRGIN MEDIA, U.K.
BEFORE 26%; AFTER 21%
U.S. COMPANY, % OF MERGED COMPANY OWNED BY U.S. PARTNERS SHAREHOLDERS
FOREIGN MERGER PARTNER, NEW TAX HOME
ESTIMATED EFFECTIVE TAX RATE:
BEFORE MERGER %; AFTER MERGER %
EATON, 73%
COOPER INDUSTRIES, IRELAND
BEFORE 9%; AFTER 1%
While Cooper Industries execs
still worked in Houston, it
reincorporated in Bermuda in
2002 (when such a non-merger-
related move was still legal). It
moved to Ireland in 2009. Eatons
top brass still work in Cleveland.
7%
6
5
4
3
2
1
0
$160
140
120
100
80
60
40
20
0
2010 2011 2012 2013 2014
$1 BIL
$1.3 BIL
$585 MIL
$75 MIL
INVERSION M&A ($BIL) % OF GLOBAL M&A
$13 BIL
$4.9 BIL
Tax Dodgers Inc.
Spurred on by fee-hungry investment bankers and
fearing a congressional crackdown, U.S. companies are
rushing to do inversions: merger deals with foreign com-
panies that allow them to reincorporate in a country with
lower corporate income taxes. Already 2014 has seen
about 55% of all inversion deals (in dollar value) since
1996, with Burger Kings bid to swallow Canadas Tim
Hortons doughnut-shop chain the latest to make news.
Besides cutting tax on future earnings, inversion allows a
multinational to tap into past prots and cash stockpiled
overseas while avoiding U.S. tax. The circles show the size
and status of inversion bids: Gold are done deals, blue are
pending, and gray have fallen apart. The U.S. company is
in black, as is the share of the merged company its cur-
rent shareholders will own; it must be less than 80% for
the tax trick to work. Foreign partner and new tax home
country are in red. Estimated before-and-after efective
tax rates, if available, are in blue and gold, respectively.
INDUSTRY ATLAS
FEE FRENZY
Inversion volume has
skyrocketed as Wall Street
rushes to cash in at a
window that could be
slammed shut.
VALUE OF
DEAL
PENTAIR, 48%
TYCO, SWITZERLAND
BEFORE 29%; AFTER: 25%
Source: Credit Suisse.
2011 2012 2013 2014
SEPTEMBER 29, 2014 FORBES | 19
LeaderBoard
ACTAVIS, 77%
WARNER CHILCOTT, IRELAND
BEFORE 39%; AFTER 17%
Its new Irish tax home helped
generic-drug maker Actavis acquire
Forest Laboratories less than a year
later.
OMNICOM GROUP, 50%
PUBLICIS GROUPE, U.K.
The deal to create the worlds largest
ad company collapsed in May amid
clashing egos and European regulators
concerns over the plan to incorporate
the merged rm in the Netherlands
while making the U.K. its tax home.
PERRIGO, 71%
ELAN, IRELAND
BEFORE 30%;
AFTER 20%
APPLIED MATERIALS, 68%
TOKYO ELECTRON,
NETHERLANDS
BEFORE 26%; AFTER 17%
ENDO HEALTH
SOLUTIONS,
78%
PALADIN LABS,
IRELAND
BEFORE 29%;
AFTER 20%
HORIZON
PHARMA, 74%
VIDARA
THERAPEUTICS,
IRELAND
CHIQUITA BRANDS INTERNATIONAL, 51%
FYFFES, IRELAND
This combo will be the worlds top
banana producer, selling
160 million boxes a year.
QUESTCOR PHARMACEUTICALS, 49.5%
MALLINCKRODT, IRELAND
Hedge fund billionaire John Paulson, the
largest shareholder of Mallinckrodt,
pushed for the deal, which is expected to
lower Questcors tax rate by 10%.
AUXILIUM
PHARMACEUTICALS, 76%
QLT, CANADA
WALGREEN
ALLIANCE BOOTS,
SWITZERLAND
On Aug. 6, when
Walgreen caved to
pressure and said it
wouldnt move its tax
home (as planned)
to Switzerland, its
stock fell 14%.
BURGER KING WORLDWIDE
TIM HORTONS, CANADA
A new Canadian tax home
should help the King tap about
$500 million in past foreign
prots, without a U.S. tax hit.
MYLAN, 79%
ABBOTT NON-U.S.
DEVELOPED MARKETS,
NETHERLANDS
SALIX PHARMACEUTICALS, <80%
COSMO TECHNOLOGIES, IRELAND
FOREST
LABORATORIES, 35%
ACTAVIS, IRELAND
MEDTRONIC, 70%
COVIDIEN, IRELAND
BEFORE 20%; AFTER 16%
ALLERGAN, 44%
VALEANT, CANADA
ABBVIE, 75%
SHIRE, U.K.
BEFORE 22%; AFTER 13%
PFIZER, 74%
ASTRAZENECA, U.K.
While ghting of Pzer, AstraZeneca
fanned the anti-inversion ames
in Washington. But with at least 70%
of its $49 billion cash hoard abroad,
Pzer is still looking to invert.
$24 BIL
$19.3 BIL
$28 BIL
$47.9 BIL
$55 BIL
$53 BIL
$122.3 BIL
$14.5 BIL
$14.1 BIL
$8.5 BIL
$8.6 BIL
$9.3 BIL
$5.8 BIL $5.3 BIL
$2.7 BIL
$505
MIL $660 MIL
$1.5 BIL
$2.7 BIL
Sources: Thomson Reuters; Credit Suisse; Tax Analysts;
company reports.
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