The opening paragraphs from the article, Washington Is Clamping Down on Corporate Inversions – What’s Next?, follow. The piece was co-authored by Beaulieu and Bracewell partner Abraham (Avi) Reshtick.
You can read the full piece on the Industry Week site, here.
The recent wave of U.S. companies exploring corporate inversions, which has involved mega-billion dollar deals and household brands such as Pfizer and Burger King, has attracted significant attention and fierce criticism. Some people have gone so far as to characterize these U.S. companies as “unpatriotic” or even worse. The combination of inversion activity reaching new heights and the Congressional deadlock has caused the Obama Administration to act unilaterally in an effort to make inversions less attractive.
On September 22, 2014, the IRS released Notice 2014-52 describing regulations to be issued in order to limit the tax benefits of certain inversion transactions. The notice, focusing on certain post-inversion planning techniques, already led to the termination of AbbVie’s $54 billion merger with Shire Plc (triggering $1.64 billion in break-up fees)
and impacted other pending deals.
Further developments in this area are to be expected but they would likely depend, on the one hand, on the appetite of dealmakers to pursue additional inversions using tax-enhancing techniques given the current uncertain environment and, on the other hand, on the impact such activity may have on
prompting further action by Treasury or breaking the Congressional deadlock.
Read the full article on the Industry Week site here.