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Eversheds comment: AbbVie move highlights issues surrounding reactive regulatory changes to established rules

  • United Kingdom

    15-10-2014

    Commenting on news that AbbVie is reconsidering its $54bn takeover of UK drug maker Shire in light of the recent crackdown on tax inversion deals, Ben Jones partner and tax expert at law firm Eversheds, says:

    “It is of course right and proper for the Board of AbbVie to give further consideration to the proposed merger with Shire in light of the changed fiscal environment in which the merger would occur. Leaving aside the underlying issues with so-called “corporate inversions”, this reconsideration and the potential for the merger to collapse (with significant wasted costs incurred) highlights the serious issues with reactive changes to established rules implemented with immediate effect.

    "A key requirement for businesses across the world is certainty as to the environment in which they operate, be it from a tax, legal, regulatory or other perspective. Business cannot operate effectively when the playing field is changed overnight. To avoid prejudice to businesses operating in accordance with the pre-existing rules, changes such as those made to US tax rules relating to corporate inversions really need to be preannounced with sufficient time for business to react.”

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