TAX SHELTERS AND BENEFICIAL FOREIGN TAX MERGERS

“The company [Valeant] . . .  pulled every trick in the financial-engineering handbook. In 2010, it merged with a Canadian company, in order to bring down its tax rate, and it sheltered its intellectual property in tax havens like Luxembourg. It used opaque accounting methods that made it hard for investors to judge how well acquired companies were doing. To ward off competition from generic drugs, Valeant entered into a complicated relationship with a mail-order pharmacy called Philidor. Meanwhile, it paid its executives exceedingly well, and tied their compensation to shareholder returns, thus encouraging a single-minded focus on stock price. Valeant embodied practically everything that people hate about business today.”

James Surowiecki, “The Roll-Up Racket,” in the New Yorker, April 4, 2016, page 31.