
James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comOf Counsel
732-568-8360 jmcdonough@sh-law.comIf Monsanto’s proposed tax inversion plan is accepted, this would mark the largest tax inversion in U.S. history with estimated annual savings close to $500 million.
According to Monsanto CEO and Chairman Hugh Grant, the merger is designed to encompass the two corporations into a global agribusiness enterprise to expand geographical outreach. However, the tax inversion acquisition would effectively reduce Monsanto’s tax rate from 29 percent to 15 percent, the WSJ reported. Britain is an ideal location for overseas subsidiaries to set up headquarters because of its 20 percent tax rate, which includes additional tax incentives for foreign-based entities.
This merger would become the largest ever agribusiness takeover, which would effectively monopolize the global seeds and chemicals markets, the WSJ report noted. Monsanto and Syngenta combined for $57 billion in pesticide sales alone in 2014, with a 30 percent market share on pesticides, and another 45 percent market share for seeds. Together, the two companies would generate $600 million in new revenue, increasing cash-earnings-per-share by over 16 percent from the tax savings and benefits structure in Britain, according to a report in Bloomberg Business.
Ultimately, farmers would be most affected by the deal because it could significantly change all agribusiness sectors. According to John Hansen, President of the Nebraska Farmers Union and a prominent board member of the National Farmers Union, the deal would eliminate competition.
“When you have that much market power, there’s too much money to be made using your market power to push the company’s interests forward,” Hansen said.
President Obama has been an outspoken critic of tax inversions because these strategies manipulate the tax system and diminish the U.S. tax base. Several other Congressman have been critical of tax inversions as well, including Senator Richard Durbin who argued that rules should be enacted to block these strategies.
“It’s clear that Monsanto – a company that has prospered and expanded in large part due to U.S. taxpayer-funded programs and services – intends to reincorporate overseas as part of its proposed acquisition of Syngenta in order to avoid paying U.S. taxes,” he argued. “Hundreds of millions of dollars that could be invested in the infrastructure, education and research that companies rely on will be lost if Monsanto is allowed to go through with this corporate inversion scheme.”
In fact, several Democrats have proposed an overhaul of the federal tax system where corporations like Monsanto would continue to pay U.S. tax rates overseas. According to USA Today, with involvement from U.S. politicians, the floodgates have opened to eliminate the tax inversion loophole altogether.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
The bankruptcy legal landscape presents both challenges and opportunities for businesses navigating financial distress. Understanding current bankruptcy trends can help businesses make more informed and strategic decisions. Corporate Bankruptcy Filings Trending Upwards Bankruptcy filings continued to trend upwards in 2024. According to statistics released by the Administrative Office of the U.S. Courts, personal and business […]
Author: Brian D. Spector
In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]
Author: Kenneth C. Oh
On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]
Author: Matthew F. Mimnaugh
If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]
Author: Jesse M. Dimitro
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!