LONDON (AFP) – Shire Pharmaceuticals on Wednesday urged AbbVie to proceed with its agreed $54-billion takeover, after the US drugmaker decided to reconsider the deal citing a US crackdown on tax inversions.
Chicago-based AbbVie announced in a statement overnight that its board will meet next week to reconsider the Shire bid, in light of White House proposals to stop US companies moving offshore to cut their tax bills.
The news sent Shire’s share price plunging by almost a third in early morning deals on the London Stock Exchange.
“Shire confirms that overnight it received notice from AbbVie … of the AbbVie board’s intention to consider whether to withdraw or modify its recommendation,” said a statement from Shire, whose registered office is Jersey in the British Channel Islands.
It added: “The board of Shire believes that AbbVie should proceed with the recommended offer on the agreed terms in accordance with the cooperation agreement.”
If the deal is called off, AbbVie would have to pay a break fee of approximately $1.635 billion to Shire.
In July, Shire accepted the £32-billion takeover bid, in a deal which was expected to cut AbbVie’s effective tax rate to about 13 per cent by 2016.