AbbVie is reconsidering its £32 billion merger with British drug rival Shire after it emerged US authorities are to clamp down on so-called “tax inversion” deals.
Chicago-based AbbVie, which makes top-selling arthritis drug Humira, is eager to buy Shire to reduce its US tax bill by moving its tax base to the UK and diversifying its drug portfolio.
However, the US Treasury Department unveiled harsher-than-expected changes late last month to its existing rule book for on corporate "inversions," which have become a cause of concern in Washington about the threat posed to the US corporate income tax base.
AbbVie also intends to reduce its reliance on Humira, the world's top selling medicine which loses US patent protection in 2016.
AbbVie's said its board plans to meet on next Monday to consider whether to withdraw or modify its recommendation on the deal with Shire.
"At this time, AbbVie's board of directors has not withdrawn or modified its recommendation to AbbVie stockholders," the company said.
Pfizer Inc tried to similar strategy earlier this year when it made a bid for Britain's AstraZeneca worth $118 billion, which was rejected.
Under UK takeover rules, AbbVie has until July 18 to announce a firm offer for Shire, extend the deadline for an offer, or walk away.
Dublin-based Shire sells drugs for rare diseases.
Reuters
