(Adds details of Durbin letter, Wyden comment, background,
By Kevin Drawbaugh
WASHINGTON Aug 14 A senior U.S. senator said on
Thursday he has written to Hospira Inc and urged the
drug and medical device maker not to move its tax domicile
abroad to save on U.S. taxes.
Citing recent reports that Hospira plans to buy the medical
nutrition unit of France's Danone SA, Dick Durbin said
in a statement he told Chief Executive Officer Michael Ball that
Hospira should not "turn its back on American taxpayers and
consumers by taking advantage of a tax loophole called
The statement from the No. 2 Democrat in the Senate came
amid growing concern in Washington with inversion transactions,
which allow U.S. corporations to shift their tax home-base to a
different country and cut their U.S. tax bills.
Of 52 inversions and similar deals done since 1983, 22 have
occurred just since 2008, with 10 more being finalized and many
more said to be in the works.
Hospira is based in Lake Forest, Illinois, Durbin's home
state. The company could not immediately be reached for comment.
In a letter to Ball, Durbin said: "Recent reports indicate
that Hospira plans to buy the medical-nutrition unit of the
French company Danone so that it can claim domicile abroad and
dodge U.S. taxes.
"I strongly urge you and the board of directors not to move
your company's headquarters overseas, since a significant
portion of Hospira's revenue comes from U.S. taxpayers and
depends on U.S. taxpayer-funded support."
Hospira's shares closed on Thursday up less than 1 percent
at $55.71 on the New York Stock Exchange.
The Financial Times, citing people familiar with the
situation, reported last month that Danone was in talks to sell
its medical nutrition business to Hospira in a deal valuing the
unit at about $5 billion.
The business paper said on its website that no deal was
certain and the talks were ongoing.
Contacted by Reuters on July 27, a spokesman for Danone in
Paris declined to comment.
Separately, senators Ron Wyden, Carl Levin and Charles
Schumer, all Democrats, released statements of concern on
Thursday about the inversion wave.
"The inversion virus continues to plague our country and I'm
encouraged that colleagues from both sides of the aisle are
offering ideas on a solution," said Wyden in a statement.
He chairs the tax law-writing Senate Finance Committee.
(Reporting by Kevin Drawbaugh; Editing by Richard Chang and