Shire last night confirmed its $54bn (£32bn) deal with AbbVie was off, with a $1.635bn break fee owed.
In a statement, the Dublin-based pharmaceuticals company said: “In light of the AbbVie Board’s decision to change its recommendation and to advise its shareholders to vote against its Offer, Shire believes that there is now no realistic prospect of AbbVie completing its Offer.”
AbbVie’s offer for Shire was called off due to the introduction of new US Treasury rules designed to curb the practice of companies making strategic foreign purchases in order to avoid tax.
But Shire, which is due to report third-quarter earnings on Friday, argued it is a “well-positioned independent business with a focused growth strategy” and a “robust momentum throughout the offer period”.
The news came as Shire’s chief financial officer (CFO) James Bowling announced he was leaving the company at the end of the first quarter of 2015 to take up the top finance role at water company Severn Trent, replacing retiring CFO Mike McKeon. Shire is now searching for Bowling’s replacement.
Flemming Ornskov, Shire’s chief executive, said: “James has helped build and lead a high-quality finance team at Shire. We are very grateful to him for his interim leadership over the past seven months, and his many contributions to Shire in almost ten years with the company. We wish him well in his future endeavors.”
Liv Garfield, chief executive at Severn Trent, commented: “I am very excited that we have been able to attract such a high calibre person as James to Severn Trent.”