Abbvie ABBV -0.24%, the pharmaceutical company based in North Chicago, Illinois, said on Friday that it had agreed to buy U.K. drug maker Shire for $54 billion in a transaction that is designed to lower the American company’s tax rate, the largest inversion deal ever.
U.S. companies, particularly pharmaceutical companies, have been increasingly buying foreign companies in order to lower taxes by reincorporating overseas. There has been a steady drumbeat of such inversion deals that involve ever larger and more well-known U.S. companies and Washington has expressed its dissatisfaction with the tactic.
Treasury Secretary Jacob Lew this week pushed Congress to do something about the wave of inversion deals, but there does not appear to be any imminent agreement between Republicans and Democrats on how to do so.
Lowering its tax rate appears to be the primary reason that AbbVie has entered into a transaction with Shire, whose board supports the deal. Earlier this week, a big pharmaceutical company based outside Pittsburgh, Mylan MYL -0.33% Laboratories, announced it would buy Abbott Laboratories ABT +2.07%’ international generic drug business in a $5.3 billion deal that will allow Mylan to reincorporate in the Netherlands. Mylan is run by Heather Bresch, the daughter of U.S. Senator Joe Manchin of West Virginia.
This article has been extracted from http://www.forbes.com, please click on this link to read the article in full http://www.forbes.com/sites/nathanvardi/2014/07/18/abbvie-to-buy-shire-for-54-billion-in-biggest-inversion-deal-ever/
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