Subsequent Events

3 Months Ended

Mar. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Notice of Proposed Adjustment

On April 26, 2019, we received a revised Notice of Proposed Adjustment (“NOPA”) from the IRS regarding transfer pricing positions related to the IRS audit of Athena for the years ended December 31, 2011, 2012 and 2013. The NOPA carries forward the theory from a 2017 draft NOPA that when Elan took over the future funding of

Athena’s in-process R&D in 1996, after it acquired Athena in 1996, it should have paid a substantially higher royalty rate for the right to exploit Athena’s intellectual property, rather than rates based on transfer pricing documentation prepared by Elan's external tax advisors. The NOPA proposes a payment of $843.0 million, which represents additional tax and a 40% penalty. This amount excludes consideration of offsetting tax attributes and potentially material interest. We strongly disagree with the IRS income position and will pursue all available administrative and judicial remedies, including potentially those available under the U.S. - Ireland Income Tax Treaty to alleviate double taxation. No payment of the additional amounts is required until the matter is resolved administratively, judicially, or through treaty negotiation. While we believe our position to be correct, there can be no assurance of an ultimate favorable outcome, and if the matter is resolved unfavorably it could have a material adverse impact on Perrigo’s liquidity and capital resources (refer to Note 12).

Animal Health Divestiture

On May 8, 2019, we signed a definitive agreement for the sale of our animal health business to PetIQ for $185.0 million in cash, plus a working capital adjustment. We expect to finalize the sale within the next six months. The divestiture of this business is not expected to have a material impact on our operations or financial results.

Ranir Global Holdings, LLC

On May 8, 2019, we reached a definitive agreement to purchase privately-held Ranir Global Holdings, LLC (“Ranir”) in a transaction valued at $750.0 million on a cash-free, debt-free basis. We intend to fund the transaction with approximately $450.0 million of cash on hand and the balance through short-term debt. Headquartered in Grand Rapids, Michigan, Ranir is a leading global supplier of private label and branded oral care products. The transaction advances our transformation to a consumer-focused, self-care company while enhancing our position as a global leader in consumer self-care solutions. The proposed transaction, which has been unanimously approved by both our and Ranier's boards of directors, is subject to the satisfaction of closing conditions, including customary regulatory approvals. The transaction is expected to close during the third quarter of calendar year 2019.