Case | HBS Case Collection | September 2002 (Revised October 2002)

Corporate Inversions: Stanley Works and the Lure of Tax Havens

by Mihir A. Desai, James R. Hines, Jr and Mark Veblen


In response to Stanley Work's announcement that it is moving to Bermuda--and the associated jump in market value--a major competitor sets out to determine how the market is valuing the consequences of moving to a tax haven and whether his company should invert to a tax haven. In particular, the competitor's CFO needs to attribute Stanley's stock price movements across several dimensions of potential tax savings (tax savings on foreign operations and on interest payments) to see if there might be something else at play (earnings stripping). In the process, the mechanics and incentives created by the international tax regime are illustrated. To obtain executable spreadsheets (courseware), please contact our customer service department at

Keywords: Financial Management; Taxation; Financial Strategy; Credit Derivatives and Swaps; International Finance; Valuation; Financial Markets; Financial Statements; United States;


Desai, Mihir A., James R. Hines, Jr, and Mark Veblen. "Corporate Inversions: Stanley Works and the Lure of Tax Havens." Harvard Business School Case 203-008, September 2002. (Revised October 2002.)