AbbVie’s board of directors is recommending that its shareholders vote against the deal to buy Shire Pharmaceuticals.
AbbVie and its board made this decision following a detailed consideration of the impact of the U.S. Department of Treasury’s unilateral changes to the tax rules.
The U.S.-based drug maker planned to incorporate a new company on the island of Jersey, where Shire is based. That would allow the combined companies to avoid having to pay U.S. corporate taxes, which are higher than most countries.
“Although the strategic rationale of combining our two companies remains strong, the agreed-upon valuation is no longer supported as a result of the changes to the tax rules, and we did not believe it was in the best interests of our stockholders to proceed,” says AbbVie chairman and CEO Richard A. Gonzalez.
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