“The Company's decision was based upon its assessment of the September 22, 2014 notice issued by the U.S. Department of Treasury, which re-interpreted longstanding tax principles in a uniquely selective manner designed specifically to destroy the financial benefits of these types of transactions,” AbbVie said in the statement. “The notice introduced an unacceptable level of risk and uncertainty given the magnitude of the proposed changes and the stated intention of the Department of Treasury to continue to revise tax principles to further impact such transactions.”
AbbVie CEO Richard Gonzalez said the company has built a “strong, sustainable strategy” with a robust pipeline and it remains focused building the business through research and development, partnerships and acquisitions, among other aspects.
“The unprecedented unilateral action by the U.S. Department of Treasury may have destroyed the value in this transaction, but it does not resolve a critical issue facing American businesses today,” Gonzalez said in the statement. “The U.S. tax code is outdated and is putting global U.S.-based companies at a disadvantage to foreign competitors in an area of critical importance, specifically investing in the United States. Comprehensive tax reform is essential to create competitiveness and to stimulate investment in the economy.”
AbbVie will pay Shire a $1.64 billion break-up fee.
"It's official: AbbVie and Shire end merger talks" originally appeared in Crain's Chicago Business.