AbbVie blames “outdated” US tax law for Shire deal collapse

 
Oliver Smith
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Richard Gonzalez hit out at US tax laws (Source: Getty)
The boss of US drugs giant AbbVie hit out at the “outdated” US tax regime after confirming the $55bn (£34bn) takeover of Shire had collapsed.

Chief executive Richard Gonzalez led the charge to buy Dublin drugmaker Shire for three months, only to walk away from the deal last week blaming changes to the US tax rules to crack down on so-called tax inversions – where firms move their tax headquarters to another country through acquisition.

“The unprecedented, unilateral action by the US Department of Treas­ury may have des­troy­ed the value in this transaction, but it does not resolve a critical issue facing American businesses today,” said Gonzalez.

“The US tax code is outdated and is putting global US-based companies at a disadvantage to for­eign competitors in an area of critical importance, specifically investing in the United States.”

On Monday, Shire confirmed in a statement that its deal with AbbVie was off and it would receive a $1.635bn break fee from the US company due to its collapse.

Shire, which is due to report third-quarter earnings on Friday, said it remained a “well-positioned independent business with a focused growth strategy” and a “robust momentum throughout the offer period”.

The news came as Shire’s finance chief 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 finance boss Mike McKeon.

Shire is now searching for Bowling’s replacement.

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