Shire share price falls over AbbVie deal worries, dragging pharma shares and FTSE down

 
Lynsey Barber
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Pharmaceutical firms have taken a hit (Source: Getty)

Shire shares fell almost 30 per cent in early trading this morning after its potential buyer AbbVie said it was reconsidering the $54bn (£32bn) deal.

AbbVie said it was rethinking the deal due to the US Treasury’s crackdown on the tax loophole that allows US firms to move headquarters to another country via a takeover in order to pay a lower rate of corporate tax outside of the US.

The news dragged down fellow drugmakers AstraZeneca, Smith & Nephew and GSK as it signalled the wider sector may no longer be as ripe a target for takeovers as it has been previously.

AstraZeneca, recently targeted by US giant Pfizer, saw shares fall as low as 4.5 per cent this morning, while Smith & Nephew shares fell nearly four per cent and GSK was down 1.4 per cent.

The pharmaceutical shares drove FTSE 100 and FTSE Eurofirst 300 losses this morning.

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