Transcription
Wall Street won't tell you how they avoid paying taxes, but I will.
See, apex corporate predators, they do not pay capital gains taxes. They execute something called a reverse Morris trust. So, they carve out the assets, and then they push massive debt onto the new shell company, and they use that borrowed cash to pay themselves multi-billion dollar tax-free dividends before the deal even closes.
Look at Unilever. They merged their foods division into McCormick, and if you want some crazy numbers, in April of 2016, Unilever extracted $15.7 billion in debt-funded cash upfront. They kept 65% of the new empire, zero capital gains triggered.
The genius is the legal bypass. In order to stay tax-free, the original owners have to retain 50.1% of the combined company. But, elite operators use institutional shareholder overlap to cheat the math. If mega funds own heavy stakes in both companies, you can mathematically prove continuity of control, even if you only take 39% of the equity.
They [snorts] siphon the liquidity, they bypass the tax code, they force the desperate buyer to absorb crushing leverage. Look, if the seller demands a massive special dividend before the ink even dries, you're not buying a strategic asset. You're funding their escape route, and so are the taxpayers. But, they won't tell you.