DEALTALK-Tax leverage helps make Irish pharma a popular target

Mon Jun 10, 2013 2:56pm EDT
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* Elan has interested buyers

* Shire, Jazz could be attractive targets -sources

* Deals breed deals when it comes to lower taxes

By Jessica Toonkel

NEW YORK, June 10 (Reuters) - Irish pharmaceutical companies are becoming increasingly popular takeover targets as buyers compete for benefits seen in the country's lower tax rates.

On Monday, Dublin-based drugmaker Elan announced that it had received unsolicited inquiries from potential buyers, as it seeks to fend off a hostile takeover from Royalty Pharma. Specifically, a number of mid-sized pharmaceutical companies are potentially interested in buying the company, sources told Reuters.

Last month, generic drugmaker Actavis announced a $5 billion acquisition of Dublin-based Warner Chilcott, effectively allowing it to lower its tax rate from 28 percent to 17 percent. Some analysts predict it could end up even lower.

Other potential Irish pharma targets include Shire PLC and Jazz Pharmaceuticals, industry bankers, who wished to remain anonymous because they are not permitted to speak to the media, told Reuters.

Irish companies have long been attractive acquisition targets for buyers that can easily move their headquarters abroad because of the very low 12.5 percent corporate tax rate, compared to 35 percent in the United States.   Continued...