Ireland’s Elan bought by US firm Perrigo

AMERICAN drug maker Perrigo yesterday agreed to buy Irish peer Elan for £5.5 billion following a bitter takeover battle against New York-based life sciences investor Royalty Pharma.

Elan had rejected three lower bids from Royalty Pharma amid court hearings, injunctions and a war of words, before putting itself up for sale last month.

Analysts at Berenberg Biotech said: “Elan has uncovered an excellent offer for its shareholders, substantially ahead of the level Royalty Pharma could achieve.”

Elan is especially appealing for companies like Perrigo that can easily move their head offices abroad because of the very low 12.5 per cent corporation tax rate in Ireland, compared with 35 per cent in the United States.

Fellow generic drug maker Actavis’ acquisition of Dublin-based Warner Chilcott in May allowed it cut its tax rate to 17 per cent from 28 per cent.

The Elan deal buys Perrigo a full tax domicile in Ireland. Perrigo chief executive Joe Papa said the acquisition would lower Perrigo’s effective tax rate to the high teens from around 30 per cent now.