Drugmaker AbbVie's announcement that it is reconsidering its nearly $55 billion acquisition of drugmaker Shire is either a negotiating ploy or proof the Obama administration's recent clampdown on corporate tax inversions is having an effect, experts said.
Dublin-based Shire's stock, which is listed on the London exchange, plummeted the most it has in a dozen years after North Chicago-based AbbVie said that its board plans to meet by Monday to re-evaluate its recommendation that shareholders approve the deal with Shire, which has 1,500 employees in Lexington and Cambridge.
AbbVie, which has 700 Massachusetts employees and a biologics manufacturing plant in Worcester, said the board will consider the impact of the Treasury Department's new rules, which would reduce the benefits of re-incorporating in Britain, where the tax rate is 21 percent, compared to 35 percent in the United States.
"The fact that AbbVie apparently is willing to pay a $1.6 billion fee to walk away from the deal suggests that it's not as attractive as they expected it to be ... and the Treasury has accomplished at least some of what it set out to accomplish," said Steven Rosenthal, senior fellow at the Tax Policy Center, a nonpartisan Washington, D.C., think tank.
But Joseph B. Darby III, a Boston tax attorney, said AbbVie's seeming change of heart could be an attempt to lower the price of the acquisition and he doesn't think the Treasury's announcement last month is going to stop companies from moving overseas.
"You can't have the highest corporate tax rate in the world and expect companies to stay here," Darby said. "They'll either migrate or get bought up by foreign companies."
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