North Chicago-based AbbVie has officially killed its planned combination $55 billion takeover of Dublin-based rival Shire following changes to new U.S. tax rules.
The company had recommended its shareholders vote “no” on the deal last week. Under the terms of the deal, AbbVie will be made to pay a $1.64 billion breakup fee for changing its mind.
The deal would have been a so-called corporate tax inversion, which means AbbVie would have been able to take advantage of a lower tax rate through buying a company overseas. But swift action by the government quashed the potential financial reward.
AbbVie directly blamed the government for its about face, saying the U.S. Treasury “re-interpreted longstanding tax principals in a uniquely selective manner designed specifically to destroy the financial benefits of these types of transactions.”
More to come.
