Drug Discovery and Development

  • Home Drug Discovery and Development
  • Drug Discovery
  • Genomics/Proteomics
  • Oncology
  • Neurological Disease
  • Infectious Disease
  • R&D 100 Awards
  • Pharma 50
    • 2022 Pharma 50
    • 2021 Pharma 50

AbbVie Sours on $55B Shire Deal After Tax Changes

By Drug Discovery Trends Editor | October 16, 2014

AbbVie’s board is telling shareholders vote against its own $55 billion takeover bid for the Irish drugmaker Shire after the U.S. made reincorporating overseas a less lucrative tax maneuver.
 
The company, based in North Chicago, Illinois, said that changes led by the U.S. Treasury Department introduced an “unacceptable level of uncertainty” and eliminated some of the financial benefits.
 
If Abbvie does walk away, it would be the biggest deal yet that has collapsed after a public backlash and changes in U.S. tax policy.
 
Walgreen scotched its $5 billion bid for the U.K.’s Alliance Boots in August and earlier this month, Salix Pharmaceuticals scrapped its merger with a subsidiary of an Italian drugmaker.
 
The new regulations pushed by the Obama administration aim to limit the practice known as an inversion, in which a U.S. company buys or merges with a company in a country with lower corporate tax rates, and then reincorporates there.
 
U.S. companies typically keep their physical corporate headquarters where they are, in the U.S.
 
Numerous companies, many in health care, had announced their intention to pursue inversions in recent months.
 
Shire has insisted AbbVie Inc. go ahead with the takeover and reincorporate on the British island of Jersey, whereShire is incorporated. Since Abbvie said it was reconsidering such a maneuver earlier this week, Shire’s stock has plummeted more than 24 percent.
 
Abbvie has not budged from its stance.
 
“The agreed upon valuation is no longer supported as a result of the changes to the tax rules and we did not believe it was in the best interests of our stockholders to proceed,” said AbbVie’s chairman and CEO Richard Gonzalez.
 
Shire said Thursday that its board is considering the most recent development and will make a further announcement in due course.
 
AbbVie faces a breakup fee of around $1.6 billion if it walks away from the deal.
 
Date: October 16, 2014
Source: Associated Press

Filed Under: Drug Discovery

 

Related Articles Read More >

Takeda Pharmaceutical in the Drug Discovery & Development Pharma 50
Takeda’s Takhzyro fares well in pediatric hereditary angioedema study
Novartis in the Pharma 50
Novartis to cut up to 8,000 positions
Gilead Sciences in the Drug Discovery & Development Pharma 50
Gilead resubmits application to FDA for twice-yearly HIV drug lenacapavir
George Floyd mural
How the pandemic and George Floyd made clinical trial diversity a priority

MEDTECH 100 INDEX

Medtech 100 logo
Market Summary > Current Price
The MedTech 100 is a financial index calculated using the BIG100 companies covered in Medical Design and Outsourcing.

Need Drug Discovery news in a minute?

We Deliver!
Drug Discovery & Development Enewsletters get you caught up on all the mission critical news you need. Sign up today.
Enews Signup
Drug Discovery and Development
  • MASSDEVICE
  • DEVICETALKS
  • Medical Design & Outsourcing
  • MEDICAL TUBING + EXTRUSION
  • MEDTECH 100
  • Medical Design Sourcing
  • Subscribe to our Free E-Newsletter
  • Contact Us
  • About Us
  • Advertise With Us
  • R&D World
  • Drug Delivery Business News
  • Pharmaceutical Processing World

Copyright © 2022 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising | About Us

Search Drug Discovery & Development

  • Home Drug Discovery and Development
  • Drug Discovery
  • Genomics/Proteomics
  • Oncology
  • Neurological Disease
  • Infectious Disease
  • R&D 100 Awards
  • Pharma 50
    • 2022 Pharma 50
    • 2021 Pharma 50