Wants Shareholders To Approve Move
To Switzerland
Garmin announced last week that its board of directors has
unanimously approved moving the place of incorporation of the
company from the Cayman Islands to Switzerland. Garmin’s
shareholders will be asked to vote in favor of the proposed change
in place of incorporation, also known as a redomestication, at a
shareholders meeting, which is expected to be held on May 20, 2010.
The redomestication will also be subject to approval of the Grand
Court of the Cayman Islands. If the redomestication is approved by
Garmin shareholders and the Grand Court of the Cayman Islands, it
is expected that a new Swiss company, also called Garmin Ltd.,
would replace the existing Cayman Islands company as the ultimate
public holding company of the Garmin group and each shareholder
will receive one share of the Swiss company for each share held of
the Cayman Islands company.
The original parent company of the Garmin group was Garmin
Corporation, a company incorporated in Taiwan. Under the legal
framework of Taiwan at the time of Garmin’s initial public
offering in 2000, it was not practical for Garmin Corporation to
offer its shares in the United States. Therefore, Garmin Ltd.
was formed in the Cayman Islands in July 2000 as a holding company
for Garmin Corporation in order to facilitate the listing of its
shares on the NASDAQ stock market in the United States.
“Following a thorough review, we have determined that it
is in the best interest of Garmin and its shareholders to change
the jurisdiction of incorporation of our group parent company to
Switzerland,” said Dr. Min Kao, chairman and CEO of Garmin
Ltd. “Switzerland is centrally located in Europe in close
proximity to our major Western and Eastern European
markets.”
“Garmin’s footprint in Europe has grown
considerably, through the acquisition of our distributors in ten
European countries during the last four years, plus our recent
establishment of an office in Poland. The Swiss office will
provide a base for expansion of certain corporate functions in
Europe and a more favorable structure from which it would be
possible to acquire or partner with European businesses. We
believe that the change of our jurisdiction of incorporation will
enhance our global business operations and reputation consistent
with our status as an international company with significant
operations in Asia, North America, as well as Europe.
Switzerland also offers a well-developed corporate, legal and
regulatory environment with an extensive network of tax treaties
with other countries,” said Kao.
Garmin GNS530
Garmin does not expect that the redomestication will have any
material impact on its financial results. Details of the proposed
redomestication are provided in Garmin’s preliminary proxy
statement, which have been filed with the SEC.
Since Swiss law does not permit shareholder rights plans, Garmin
Ltd’s board of directors has approved an amendment, subject
to the approval of the redomestication by Garmin’s
shareholders and the Grand Court of the Cayman Islands, to change
the expiration date of the rights issued under the company’s
shareholder rights plan from October 31, 2011 to the effective date
of the redomestication to Switzerland, which is currently expected
to be June 27, 2010. Accordingly, as of the effective date of the
redomestication, the rights under such plan will expire and no
longer be outstanding.