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US: AbbVie to pay $1.6B for failed Shire deal

 |  October 21, 2014

Just days after pharmaceutical conglomerate AbbVie said it was reconsidering its plans to acquire Shire due to recent crackdowns on inversion mergers, reports say the merger is officially cancelled, and that AbbVie will pay a breakup fee to Shire.

AbbVie had planned to acquire Shire for $55 billion in a takeover that would also relocate AbbVie’s tax bracket overseas to the UK. The merger would result in lower taxes for AbbVie.

But authorities in both the US and EU have recently upped criticism over such mergers; the European Commission is currently investigating whether they constitute illegal state aid, and the US introduced new limitations on the tax benefits corporations can enjoy through such mergers.

AbbVie confirmed that it has cancelled plans to acquire Shire and said it will pay the $1.64 billion breakup fee previously agreed upon.

Full content: CNBC

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