Eli Lilly & Co. is positioning itself to avoid up to roughly $2 billion in taxes by splitting off—rather than selling—its stake in a former subsidiary.
The pharmaceutical giant held on to just over 80 percent of Elanco Animal Health Inc. after selling a minority stake in the pet health company when the latter went public in September. Now Lilly is asking shareholders to exchange their Lilly stock for shares of Elanco, sparing both shareholders and itself from any tax liability, as long as the transaction adheres to certain tax code requirements.
The “split-off” under tax code Sections 355 ...
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