Biopharma giant AbbVie Inc. formally terminated its $55 billion agreement to buy drug maker Shire plc Monday, ending what would have been one of the year’s largest corporate takeovers.
Shire, which is based in Ireland, has its US headquarters and top management in Lexington. The company will receive a $1.6 billion breakup fee from Illinois-based AbbVie, which had planned to adopt Shire’s address in Dublin for tax purposes but backed away from the deal after the US Treasury Department said it was changing the rules to make such tax moves harder.
“It’s a stunning reversal from what [AbbVie] management had discussed just a couple of weeks earlier,” said specialty pharmaceuticals analysts David M Steinberg, managing director for financial firm Jefferies LLC in San Francisco.
Executives of Shire and AbbVie weren’t available to discuss the breakup of their deal, which was disclosed after US markets closed Monday. But in a statement, Shire’s chairwoman, Susan Kilsby, said the company was well-positioned to resume its growth as an independent company.
“Shire has an exceptional track record of delivering value and growth,” Kilsby said. “This growth profile has been accelerated by our new management team executing a clear and focused strategy... Whilst we are disappointed that the offer will not now complete, we continue to enjoy excellent prospects as we execute our plan to double Shire’s product sales to $10 billion by 2020.”