Dive Brief:
- The Treasury Department has issued new regulations aimed at blocking tax inversions — the controversial method in which a U.S. company lowers its taxes by reincorporating in a more tax-friendly country such as Ireland or the U.K.
- The new rules, which make inversions harder and less profitable, apply to any inversion deal that has not yet closed — including Chiquita Brands International's planned merger with Ireland's Fyffes.
- The U.S. Chamber of Commerce issued a statement blasting the new rules and suggesting Treasury's actions will push companies to create more jobs overseas.
Dive Insight:
When all the politicking is done, and everyone in Washington has had a chance to voice their support or disdain for Treasury's new rules, two things are almost certain. First, corporate finance executives will search for, and likely find, loopholes in the regulations. Second, shareholders of Chiquita (and perhaps senior management as well) will take another, more positive, look at the takeover bid from Safra and Cutrale.