ALLEGAN, Mich. (But not for long) ( TheStreet) -- The roots of Perrigo (PRGO) go back 126 years. Luther Perrigo, the proprietor of a general store and apple-drying business in western Michigan, had an idea to distribute medicines and other household goods to country stores. From these humble roots, Perrigo grew into a multi-billion dollar business selling over-the-counter and generic medicines, baby formula and nutritional supplements.
Perrigo was an American business success story. That ended Monday, when the company decided to buy Irish drug maker Elan (ELN) for $8.6 billion in order to evade... um, sorry, I mean reduce... its obligation to pay U.S. taxes.
The "new" Perrigo will no longer be headquartered in Allegan, Michigan, home of the "Old Iron Bridge." The company is moving to Dublin, Ireland where Elan is headquartered and companies pay only 12.5 percent corporate income tax.
Of course, Perrigo is not physically moving to Ireland. CEO Joseph Papa and his executives aren't selling their big houses in Michigan -- watched over by cops and firemen paid for with public funding. Their kids will continue to attend school here -- some may even go to U.S. taxpayer-funded public schools! The company's trucks will drive on roads built and maintained by U.S taxpayers.The only part of Perrigo actually moving to Ireland is its bank account. Last year, Perrigo's effective tax rate was 23 percent. That's not low enough, apparently, so Papa bought Elan and is moving the corporate books to Dublin. Perrigo is not alone in abandoning the U.S. for an overseas tax haven. Lots of companies are doing it. Apple (AAPL) is probably the most famous U.S. income tax avoider, but in healthcare, Pfizer (PFE), Amgen (AMGN) and Eli Lilly (LLY) have all moved huge chunks of their business to tax-friendly locales. Perrigo wins, America loses. --Written by Adam Feuerstein in Boston.
>To contact the writer of this article, click here: Adam Feuerstein.
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