When the facts change, I change my mind. What do you do? -- John Maynard Keynes

Friday, April 25, 2014

Walgreens, Corporate Inversion, Tax Avoidance

It is called "corporate inversion" which is another term for changing a corporation's domicile for purposes of tax avoidance -- maybe every corporation in the US will leave --

Walgreens urged to leave US to gain tax benefit - FT.com: "...The move, known as an inversion, would dramatically reduce Walgreens’ taxable income in the US, ... The investor group, which included Goldman Sachs Investment Partners and hedge funds Jana Partners, Corvex and Och-Ziff, requested the meeting after becoming frustrated by Walgreens’ refusal to consider relocating, according to people familiar with the matter. In a note last month, analysts at UBS said Walgreens’ tax rate was expected to be 37.5 per cent compared with 20 per cent for Boots, and that an inversion could increase earnings per share by 75 per cent. They added, however, that “Walgreens’ management seems more hesitant to pull the trigger near-term due to perceived political risks....”

Lots of corporations have already made the move --
Aon, from Chicago to London, (United Kingdom): "Aon's tax rate should decline, boosting earnings"
Others noted in Wikipedia:
McDermott to Panama, 1982
Helen of Troy to Bermuda, 1994
Tyco International to Bermuda, 1997
Fruit of the Loom to the Cayman Islands, 1998
Ingersoll-Rand to Bermuda, 2001
Ensco to the United Kingdom, 2009
Actavis to Ireland, 2013
Chiquita to Ireland, 2014

The Big Picture

Financial Crisis - The Telegraph

JohnTheCrowd.com | The Sailing Website

Craig Newmark - craigconnects