Ireland

Two useful AbbVie inversions to pay for failed one

20 Oct 2014

Turning tail on the $54 bln Shire deal exposes the U.S. drugmaker’s folly chasing a lower tax bill. Investors facing a $1.6 bln break fee should push for other AbbVie flips: boss Richard Gonzalez’s compensation and the company’s governance in the form of an independent chairman.

Three cheers for the end of the Double Irish

14 Oct 2014

Dublin is to annul one of the tech sector’s favourite tax ruses. The Double Irish was a distortion that allowed companies to discount entirely the costs of intellectual property. Even if Apple, Facebook et al gripe now, the simplification should ultimately benefit all companies.

Governments are real targets in Apple’s tax case

30 Sep 2014

The European Commission thinks that the iPhone maker has received preferential treatment from the Irish government. Both Apple and Dublin beg to differ. At least Brussels has put member governments on notice that tax leniency could amount to state aid.

EU shows tax dodging is a government business

12 Jun 2014

Brussels will probe three member states for their favourable tax rulings on multinationals. It alleges the decisions might have amounted to illegal state aid. That is a clever way to clamp down on tax evasion – by acknowledging that governments are aiding and abetting.

Dull industrials could make shiny tax-arb targets

22 May 2014

Juiced up on drug deals that promise big tax savings, like Pfizer’s bid for Astra, bankers are pitching copycat transactions before Congress gets wise. Tyco, Ingersoll-Rand and Pentair went abroad during a previous exodus and may tempt acquirers seeking inversions of their own.

Ryanair’s strategic restart can take off faster

19 May 2014

Europe’s biggest low-cost carrier has reacted quickly to tougher competition. The gains from better customer service, more advertising and wooing business customers could come more quickly than management’s cautious guidance implies. But investors are already on board with that.

Pfizer tax arbitrage will hasten more deals

29 Apr 2014

The biggest charm of the U.S. drug giant’s $99 bln offer for the UK’s AstraZeneca lies in switching to a lower-tax domicile. The latest and largest such deal raises the odds Congress will tighten rules. Until then, Pfizer’s validation of the tactic will encourage copycats.

Grubby assets shine in $5.6 bln tax arbitrage deal

7 Apr 2014

Tyco spinoff Mallinckrodt is paying a 27 pct premium for Questcor, a firm barraged by regulatory inquiries. Why do it? The transaction moves profits to Ireland, where the acquirer is based. It may be buying as many problems as tax savings, however.

Fyffes and Chiquita deal ripe for scrutiny

10 Mar 2014

It’s not AOL/Time Warner, but when it comes to fresh fruit, the $1 bln merger of Fyffes and Chiquita is big bananas. Dublin tax rates will help the new company, as will logistical savings. The biggest potential banana skin is antitrust concern.

Ryanair’s loss highlights need to change

3 Feb 2014

Revenue at the low-cost airline has stalled, plunging the group to a heavy third-quarter loss. The shares, however, are up smartly. Investors are relieved that guidance is unchanged. But they are putting a lot of faith in the company’s new strategy to be nice to its customers.

Bond rally stretches luck of the Irish

20 Jan 2014

Ireland is less risky than the United States, say bond markets. That’s a stunning performance for a country barely out of bailout – and it looks like a throwback to the pre-crisis era when credit risk was ignored. It may not last. And it dents Ireland’s hopes for EU debt relief. 

Ireland’s bailout escape is a calculated gamble

14 Nov 2013

Dublin won’t seek a backup facility when its bailout ends. The move shows how Ireland has regained market trust but says little for euro zone solidarity. The country has weak banks, and remains over-indebted and exposed to shocks. Still, the odds are that it will make it.

RSA isn’t in opportunistic bid territory yet

11 Nov 2013

The UK insurer has suspended its Irish bosses and issued a new profit warning. Potential predators like Allianz will have noticed. But despite a share-price rout, RSA isn’t cheap enough to make up for all the uncertainty. That buys management some breathing space.

Ryanair shares still expensive despite rapid descent

4 Nov 2013

Europe’s largest low-cost airline has spooked investors with a second profit warning in two months. Ryanair has strengths, but confidence is leeching fast. Stability may return most quickly if the company prunes its growth ambitions and focuses more on sustaining profit.

Ryanair should reflect on why it is getting flak

16 Aug 2013

The airline complies with all safety regulations and has a good record. Yet its safety culture is in focus following a pilots’ survey that Ryanair disputes. The saga is a culmination of needlessly toxic labour relations that bring little obvious benefit to the group.

Periphery can aspire to Irish-style stagnation

6 Aug 2013

Ireland has long been stuck with an in-and-out mild recession. Tentative green shoots are now sprouting, but Dublin’s dependence on external demand will keep the recovery slow and bumpy. Still, such relative stability is a fair aspiration for the rest of the euro zone periphery.

Elan acquisition contains possible side effect

29 Jul 2013

Over-the-counter drugmaker Perrigo isn’t a natural buyer for the Irish biotech. Elan is largely a shell company with cash and royalty rights to a blockbuster treatment. Tax savings dominate the logic of the $8.6 bln deal. Relying on a practice under growing scrutiny is risky.

Anglo Irish tapes will make EU largesse harder

25 Jun 2013

Dublin may have been misled by the bankers that caused its biggest financial disaster. That would be a blessing in disguise if it forced a much-needed public inquiry. But It will also strengthen the euro zone’s reluctance to use its funds to cut Ireland’s bank bailout costs.

Apple tax fight needs global response

21 May 2013

The tech giant followed the law, but its aggressive use of Irish subsidiaries to reduce tax payments fails the smell test. Ireland comes off as an unscrupulous tax haven, while the U.S. government looked the other way. It’s time for a new international deal on corporate taxes.

Euro zone daren’t flunk Lisbon’s solidarity test

12 Apr 2013

After taking a chainsaw to the Cypriot economy, euro zone officials must decide whether to give Ireland and Portugal more time to repay their bailout loans. An extension won’t cost much or save either country, and may be inevitable. Playing hardball would be self-defeating.