ALLEGAN — Perrigo Co. plc has agreed to pay hundreds of millions of dollars to settle a tax case in Ireland that could have cost far more than what the company paid.
Domiciled in Dublin but run from Allegan, Perrigo agreed to pay the Irish government 266.1 million euros — the equivalent of $308.6 million based on today’s exchange rate — to settle a case that involved the 2013 sale of patents for a multiple sclerosis drug to Biogen. The drug, Tysabri, was produced by Elan, which Perrigo acquired in 2013 for $8.6 billion.
In the settlement with the Irish Office of the Revenue Commissioners, Perrigo agreed to pay 297 million euros. The amount was reduced to about 266 million euros, and was settled without interest or penalties when taxes already paid and unused research and development credits were considered.
The Irish government in a 2018 notice sought to collect 1.6 billion euros from Perrigo, or more than $1.8 billion, for the 2013 to 2021 tax years.
“We believe settling this tax dispute with Irish Revenue is in the best interest of all of Perrigo’s stakeholders as it removes a major uncertainty that has been a significant distraction to the company over the last three years,” Perrigo President and CEO Murray Kessler said in a statement. “While we continue to believe that our tax positions were correct and would ultimately have been confirmed through the tax appeal process, we recognize that this process was uncertain and could take many more years to complete. With what was once a multi-billion-dollar uncertainty behind us, Perrigo can focus all of our efforts on delivering on our Consumer Self-Care vision and long-term value.”
The settlement sent Perrigo shares surging today. An hour after trading opened this morning, Perrigo shares were up by $5.30 per share, or more than 12.1 percent, to $48.80.