Watson Pharmaceuticals was an American success story-until it became an Irish success
story. Taiwanese-American Allen Chao founded Watson in 1983, after cobbling together $4
million in start-up funds from family, friends, and acquaintances.'Chao helmed Watson for a
decade and a half. By the time he retired in 2007, Watson was the third-largest generic-
pharmaceuticals manufacturer in the United States, with annual revenues of $2.5 billion. 2 In
2012, Watson adopted the name Actavis for worldwide operations. 3 The following year …

In a corporate inversion, a US-incorporated taxpayer renounces its status as a US
corporation and becomes incorporated, for tax purposes, in a tax-friendly foreign jurisdiction.
The recent surge in inversions is not a new phenomenon, and constitutes the fourth
generation of these transactions. Inversions are hugely controversial: critics complain of their
effects on the federal deficit, government officials accuse inverters of being unpatriotic, and
proposals abound for staunching these transactions.