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Apple Owes Ireland Billions - Good

Summary

The EU cracks down on Apple.

Dell-EMC closing.

Potash and Agrium looking to merge.

Welcome to the Preferential issue of M&A Daily

Apple

Apple (NASDAQ:AAPL) arrived in Ireland in the beginning of the 1980s when Steve Jobs opened a plant in Holyhill as mentioned in the local press at the time:

Within a decade, Apple was the largest employer in the area with a thousand employees and another five hundred contractors. The company leaned on the government for a sweetheart tax deal and they got it. The total tax savings could be as much as $19 billion.

This could cause a worldwide tax fight. The EU does not allow sweetheart tax deals. They deemed the deal to be in contravention of their rules and they could hit Apple with their biggest tax penalty ever. Apple and Ireland plan to appeal, which could buy them up to six years of delay.

The US Treasury Department is pushing back hard. Its view is that the EC is departing from EU case law and their prior decisions. They should not, according to Treasury, seek retroactive recoveries. In making their case, they cite ongoing cases involving Starbucks (NASDAQ:SBUX), Fiat (NYSE:FCAU), and Amazon (NASDAQ:AMZN). Mostly, Treasury Secretary Jack Lew is upset by this Apple case because it interferes with his ongoing work of more tightly controlling companies' transfer pricing, an issue that played a prominent role in the breakup of the Pfizer (NYSE:PFE) acquisition of Allergan (NYSE:AGN).

I love (1) corporate America generally (2) Apple in particular and (3) aggressive tax-efficiency. I am a big-time skeptic of (1) all sorts of lawyers generally (2) unaccountable, supranational bureaucracies in Brussels in particular and retroactive revenue grabs. However, so far, I am sympathetic to the EU's case. So should be anyone who wants capitalism to prevail in...


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