Company that Fled U.S. Over Taxes Now Wants Feds’ Help [View all]

[n2doc]

A biotech firm that made headlines by abandoning its status as a U.S. corporation in order to gain tax advantages is now demanding that the Federal Trade Commission help protect it from a hostile takeover bid by an Israeli company. The irony was not lost among politicians in Washington who have criticized so-called “corporate inversions.”

Mylan, a generic drug maker based outside Pittsburgh, came under intense criticism earlier this year when it followed through on a plan to acquire a smaller firm in the Netherlands, and then transfer its corporate citizenship there. The move was undertaken to reduce the amount of taxes the company pays on drugs it sells overseas, while maintaining most of its operations in Pennsylvania.

The company came under fire from members of Congress and from the Obama administration as a symbol of corporate greed being placed above commitment to the country where the company grew and flourished.

Now, though, Mylan finds itself in a bind. It is the subject of a potential hostile takeover by an Israeli generic drug giant Teva Pharmaceuticals. In an effort to further its bid to buy Mylan, Teva has purchased nearly 5 percent of Mylan’s outstanding stock. Mylan is now asking the FTC to examine the stock purchase for possible violation of the requirement that large purchases of stock of U.S. firms must be reviewed by antitrust authorities.

In legal terms, Mylan probably has at least a defensible case. The company claims that its principal office remains in Pennsylvania, which makes it a “U.S. issuer” of stock for federal anti-trust purposes.

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