By Joe Vladeck

Activist hedge funds and aggressive institutional shareholders are looking beyond U.S. shores, according to a new report from Citigroup. Despite its niche status, shareholder activism in the U.S. has generated headlines over the past several years. Most recently, investor Carl Icahn pressured Apple to return money to shareholders, arguing that the California company's stock was grossly undervalued. 

Bolstered by successes in the United States, activists are searching for new targets and are beginning to look abroad. The Citigroup report identifies factors that make international firms attractive targets of activists: unimpressive or overly conservative financials, slow growth, or unwieldy conglomerations of businesses that could be profitably broken apart. 

Check out Dealbook for a summary of Citigroup's report.

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November 15, 2013

By Joe Vladeck

Applied Materials, a California-based manufacturer of equipment for producing semiconductors, recently announced its acquisition of competitor Tokyo Electron. Following that acquisition the newly-wed companies took an increasingly popular step: They eloped to the Netherlands.  The reason?  Tax savings.

Regulations have made it more difficult for American companies to reincorporate in infamous tax shelters such as Bermuda.  As a consequence, U.S. companies like Applied Materials are increasingly acquiring smaller competitors abroad and then using the opportunity to re-incorporate in foreign jurisdictions.  Applied Materials estimates that will reduce its tax burden by 5 percent, or approximately $100 million annually. 

This "inversion" technique is growing in popularity. Of the 50 corporate "inversions," 20 have occurred in the past 18 months.  Dealbook has details on the practice.

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October 14, 2013