October 15, 2014 / 1:35 AM / in 5 years

AbbVie says to reconsider recommendation for Shire acquisition

Oct 14 (Reuters) - AbbVie Inc said it intends to reconsider its recommendation to its shareholders to vote in favor of the 32 billion pound ($54.7 billion) merger with Shire Plc due to the changing U.S. tax regulations.

Chicago-based AbbVie, which makes top-selling arthritis drug Humira, is eager to buy Shire to reduce its U.S. tax bill by moving its tax base to Britain and to diversifying its drug portfolio.

However, the U.S. Treasury Department unveiled harsher-than-expected changes late last month to its existing rule book for on corporate “inversions,” which have become a cause of concern in Washington about the threat posed to the U.S. corporate income tax base.

AbbVie also intends to reduce its reliance on Humira, the world’s top selling medicine which loses U.S. patent protection in 2016.

AbbVie’s said its board plans to meet on Oct. 20 to consider whether to withdraw or modify its recommendation on the deal with Shire.

“At this time, AbbVie’s board of directors has not withdrawn or modified its recommendation to AbbVie stockholders,” the company said on Tuesday.

Pfizer Inc tried to similar strategy earlier this year when it made a bid for Britain’s AstraZeneca plc worth $118 billion, which was rejected.

Under British takeover rules, AbbVie has until July 18 to announce a firm offer for Shire, extend the deadline for an offer, or walk away.

Dublin-based Shire sells drugs for rare diseases. (Reporting by Kanika Sikka in Bangalore; Editing by Lisa Shumaker)

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