NEW YORK ( TheStreet) -- Watson Pharmaceuticals, founded by a Taiwanese immigrant in the early 1980s and now a rival to generic drug giants Teva Pharmaceuticals (TEVA) and Novartis (NVS), is such an American success story the company has wound up in Ireland.
On Monday, Watson capped its intercontinental move when the company announced a $8.5 billion deal to buy Dublin-based- Warner Chilcott (WCRX). In order to take advantage of byzantine tax and merger laws, the combined company will now incorporate in Ireland, ending Watson's spectacular three-decade rise to become a U.S. success story in the global pharmaceutical market.
Watson was founded in 1985 by an immigrant Purdue University Ph.D., Allen Chao, and a colleague, David S. Hsia, as a fledgling pharmaceutical with a few million dollars raised by friends and family in the Taiwanese community living in California.
The company's growth to a market cap of over $16 billion and the third leading share of the generics market is nearly on par with the rise of Intel (INTC), Google (GOOG), and Yahoo! (YHOO), all great American businesses founded in the U.S. by first generation immigrants.Its move abroad, however, underscores that while the U.S. remains a hotbed of innovation, successful companies are using tax loopholes to leave the country's shores. In the case of Watson Pharmaceuticals, the corporate shape-shifting it has undertaken in the name of tax avoidance is likely to obscure the company's enterprising immigrant roots. Already, much of Watson Pharmaceuticals' history has been bleached over by corporate PR to effectuate its move to Ireland. In 2012, Watson Pharmaceuticals acquired Actavis, a Swiss competitor in the generic drugs market. While Watson was the acquirer, the company nevertheless changed its name to Actavis. "A pioneer at the dawn of the U.S. generic industry in 1984, the Watson corporate name was never registered globally... it became clear that we could not establish a single, unified market presence under the Watson brand," CEO Paul Bisaro said in an October 2012 statement.
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