In the largest tax inversion deal ever, drug maker AbbVie Inc. has agreed to acquire Shire Plc for £32bn (US$54.8bn).
Chicago-based AbbVie’s operations will remain in the US, while its tax residence will move to the UK, dropping its tax rate in 2016 from 22% to 13%. Shire will receive cash and stock valued at £52.48 per share, the biopharmaceutical company said in a statement.
AbbVie is the latest in what is becoming a large group of US pharmaceutical companies attempting to relocate their tax residences. Last year, Pfizer attempted to buy London’s AstraZeneca Plc for US$117bn. Other deals proposed or completed worth US$264bn occurred in the second quarter, according to Bloomberg data; five times more than any quarter since 2009.
AbbVie CEO Richard Gonzalez said on a conference call that the deal “has excellent strategic fit” that extends beyond lower taxes. “We wouldn’t be doing it if it was just for the tax impact,” he said.
Earlier this week, US Treasury Secretary Jacob Lew
to the top members of the House Ways and Means Committee and Senate Finance Committee, urging them to take action against the growing number of companies moving overseas to avoid taxes. Lew said he hopes that President Obama’s administration would eventually address the issue through corporate tax reform, but in the meantime, he persuaded Congress to take action before more companies move abroad. “Short of undertaking a comprehensive reform of the business tax system, there are concrete steps that Congress can take now that would address this urgent issue,” Lew wrote.
Nevertheless, the Obama administration and the gridlocked US Congress do not appear poised to take any action to stop it.
Today CGI and GTNews have announced the launch of the fifth annual Transaction Banking survey report, which offers which offers critical insight into the corporate-to-bank relationship.
On-Demand Treasury Management Solutions continue to gain increased adoption in the US and EMEA regions.
Treasurers are being expected to do more work with fewer resources than ever before, so it is little wonder that the automation of day-to-day operations was highly discussed on the second day of EuroFinance, the annual treasury event held in Barcelona this week.
Chicago based Treasury Management System (TMS) vendor GTreasury and Sydney based risk and treasury management vendor Visual Risk have joined forces in a strategic alliance to ... read more