jueves, 17 de julio de 2014

´Tax inversions´..."ahí está el detalle" en Pharma M&A.

"It seems that tax inversion contagion 
that is driving M&A transactions 
in pharma and biotech 
has finally infected 
the medical device sector."

A growing number of US companies are set to save hundreds of millions of dollars in tax by relocating to Europe after completing takeovers on the continent. 

Some of the biggest mergers and acquisitions so far in 2013 have involved so-called “tax inversions” – where a US acquirer shifts overseas, to Europe in particular, to pay a lower rate. These deals have come at a time when politicians in Washington have been increasing their calls for corporate tax reform.

Fué publicado en Pharmaceuticals hace casi un año.

Rumored tie-ups in the sector now include a whopping $100 billion bid for AstraZeneca by Pfizer, the biggest company in the sector, and a mooted $50 billion pitch for Botox maker Allergan by Valeant and activist investor Bill Ackman. 

"Bid rumors occur relatively frequently in the pharma sector," as Mark Clark, analyst at Deutsche Bank, pointed out. However, there are several factors driving companies to make deals at the moment: such as the sector's well-publicized difficulties with developing new products and pricing as well as a move to exploit a U.S. tax law.


Los hechos...lo confirman.

Despite all this, the Medtronic/Covidien merger will not result in significantly more efficient manufacturing, marketing or sales. The primary benefit to Medtronic will be sequential earnings-per-share growth. Such growth is the primary barometer for Wall Street investors who seek predictable annual increases; lack of growth becomes problematic when manufacturing and sales efforts have already achieved near maximum efficiencies. To protect the company from disinvestment and the shareowners from price deterioration, the company’s best option for maintaining growth has been to harvest offshore profits by domiciling in another country where taxes are lower than in the U.S, an increasingly popular trend known as tax inversion.  

Aunque algunos se quedaran "en puertas" (insistirán?)...

A less obvious ramification of the proposed deal, though, still must play out even though Pfizer is throwing in the towel: namely Pfizer’s bid infuriated many in Congress because it would allow the company to reincorporate in the U.K. 

It is another flavor of the perennial issue on how to tax U.S. companies both here and globally; an issue that is routinely aired whenever a high profile event highlights how U.S. companies shift operations overseas to maximize profits or minimize labor costs. Not surprisingly, legislation to prevent this or that move inevitably follows.

Estas parecen ya razones del pasado... 


Facultad Farmacia Universidad Central de Venezuela (UCV)


At the current rate there will be no specialty pharma companies based in the US, with further migration a distinct possibility until the government takes a more proactive approach to tax re-domiciliation. On Tuesday, Salix Pharmaceuticals became the latest player to acquire an Irish-based company primarily as a means to reduce its tax rate, while AbbVie continues its pursuit of Shire driven by similar motivations. 

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