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M&A Inversions in Ireland

  • Ireland
  • General

05-11-2013

The takeover by Endo Health Solutions Inc. (NASDAQ: ENDP) of Paladin Labs Europe Limited (TMX: PLB) for approximately US$1.7 billion has today been announced to the markets. The acquiring entity will be an Irish holding company.

The deal is the first Irish inversion with no primary Irish target. 

An inversion is a legal transaction whereby one corporation becomes a subsidiary of another headquartered in a foreign jurisdiction, and as a result the original corporation becomes subject to the tax laws of the foreign jurisdiction instead. 

The US Internal Revenue Service has issued regulations and has other measures to prevent the abuse of tax inversion mechanisms where there is no substantial business activities in the foreign jurisdiction.

In the past 2 years there have been a number of compliant mergers involving the relocation of a parent company to Europe. 

In the Republic of Ireland, there have been three others to date. 

  • The takeover by Jazz Pharmaceuticals Inc. (NASDAQ: Jazz) of Azur Pharma Limited, an Irish private company in January 2012. 
  • The acquisition by Eaton Corporation (NYSE: ETN) of Cooper Industries plc, an Irish public limited company in December of 2012. 
  • The acquisition by Perrigo Company (NASDAQ: PRGO) of Elan Corporation plc, the Irish company for US$8.6 billion, which should complete by the end of 2013. 

As a result, the market is becoming more adept at how to navigate through the complex statutory and regulatory hurdles necessary to structure such transactions, successfully for international tax purposes.

Eversheds Ireland had roles on the Elan and Paladin Labs transactions.

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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