AbbVie likely to withdraw from Shire takeover

AbbVie Inc.has announced that its Board of Directors' withdraws its recommendation made on July 18, 2014 regarding the proposed Shire acquisition transaction and recommends that stockholders vote against the transaction. AbbVie and its Board of Directors made this determination following a detailed consideration of the impact of the U.S. Department of Treasury's unilateral changes to the tax rules, as issued on September 22, 2014. The breadth and scope of the changes, including the unexpected nature of the exercise of administrative authority to impact longstanding tax principles, and to target specifically a subset of companies that would be treated differently than either other inverted companies or foreign domiciled entities, introduced an unacceptable level of uncertainty to the transaction. Additionally, the changes eliminated certain of the financial benefits of the transaction, most notably the ability to access current and future global cash flows in a tax efficient manner as originally contemplated in the transaction. This fundamentally changed the implied value of Shire to AbbVie in a significant manner.