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Linklaters & Alliance is expanding its presence in eastern Europe, hiring two Dutch partners to establish a tax practice in Prague.

UK law firm Lovells has acted on the demerger of Compass Hospitality from Granada Compass. The demerger is the final stage of the transformation of Granada from a media and hospitality group to a pure media company.

José Palacios, Garrigues & Andersen, Madrid

Peter Cussons Hopes for EU tax harmonization suffered a knock-back at the EU summit in Nice. Delegates at the December 2000 meeting blocked calls to drop the national veto on tax and social security.

Partners of Dutch firm Ekelmans Den Hollander and international law firm, Lovells, have voted to merge. The combined firm will be known worldwide as Lovells.

It has remained an unresolved issue in Sweden as to whether a tax surcharge that is levied on a taxpayer when providing incorrect information to the tax authorities for the assessment of tax, is a penalty or not under the European Declaration of Human Rights, article 6. Since January 1 1995, the declaration has had the status of law in Sweden. The Swedish tax authorities have taken the view that the Swedish tax surcharge is an administrative fee and not a deprivation of liberty, and is therefore not covered by the European declaration.

Michael Walutes has joined Morgan Lewis & Bockius in New York as a partner in the tax practice group. He was formerly special counsel at Sullivan & Cromwell, also in New York.

Swiss food company Nestlé is buying the US pet food company Ralston Purina for $10.1 billion.

Allen & Overy is advising Sanitec Corporation, the Finnish manufacturer of bathroom ceramics, baths and showers on its £82 million ($120 million) purchase of Caradon Bathrooms from HSBC Private Equity.

Allen & Overy is advising the UK building materials group RMC Group on its disposal of Great Mills. Great Mills' 98 DIY stores are being bought by Focus Do It All Ltd for £285 million (417.5 million) in cash.