Obama Scores Big Win Against Tax-Dodging Deals

by onepercenttakers · Published October 17, 2014 · Updated November 25, 2015

LONDON, Oct 16 (Reuters) - U.S. drugmaker AbbVie has pulled the plug on its plan to buy Dublin-based Shire , recommending shareholders vote against the proposed $55 billion takeover following new U.S. tax rules. Shire stands to be paid a break-up fee of about $1.64 billion, assuming AbbVie's shareholders follow the advice and reject the transaction. The reversal -- which had been anticipated after Chicago-based AbbVie said it was reconsidering the deal -- hands a major scalp to the U.S. Treasury, which has been fighting to make tax-avoiding acquisitions more difficult. That has hit the value of other potential takeover targets in Europe and cast a shadow over transactions that have yet to be completed. But AbbVie's retreat could spark fresh deal-making by Shire, which has a strong track record of acquisitions to fuel its fast-growing business and may now look around to buy other companies, with its firepower boosted by the break-up fee. The U.S. government's tax proposals are designed to make it harder for American firms to shift their tax bases out of the country and into lower cost jurisdictions in Europe.
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LONDON, Oct 16 (Reuters) – U.S. drugmaker AbbVie has pulled the plug on its plan to buy Dublin-based Shire , recommending shareholders vote against the proposed $55 billion takeover following new U.S. tax rules. Shire stands to be paid a break-up fee of about $1.64 billion, assuming AbbVie’s shareholders follow the advice and reject the transaction. The reversal — which had been anticipated after Chicago-based AbbVie said it was reconsidering the deal — hands a major scalp to the U.S. Treasury, which has been fighting to… Read more…