AbbVie Cites Tax Break as Motivator for Shire Deal
AbbVie says it sees a compelling tax break behind its roughly $46 billion bid to buy British counterpart Shire, and it expects the deal to expand Shire's global reach as well.
Leaders of the North Chicago, Illinois, company laid out their reasoning behind their unsolicited, cash-and-stock offer during a call with analysts two days after Shire PLC explained why it wasn't interested.
AbbVie Inc. says it expects the combined company to pay a tax rate of about 13 percent by 2016. That compares to its present rate of roughly 22 percent.
Several other U.S. companies are using mergers to reincorporate overseas in countries with lower tax rates. These moves raise concerns among some lawmakers since they can cost the federal government billions in tax revenue.
AbbVie shares rose more than 2 percent in morning trading.