AbbVie Inc and Shire PLC’s US$54.8 billion deal is set to make AbbVie the largest US company to move its legal address abroad, which would lower its taxes, as US lawmakers seek ways to curb similar transactions.
Shire shareholders are to get cash and stock valued at US$89.67 a share, the companies said on Friday in a statement.
It would allow Chicago-based AbbVie to move its legal residence, though not its operations, to the UK, lowering its tax rate in 2016 to 13 percent from 22 percent.
“This is a transaction that we believe has excellent strategic fit, well beyond the tax impact,” AbbVie chief executive officer Richard Gonzalez said during a conference call.
At the same time, Gonzalez said the higher corporate tax rate in the US is pushing companies abroad.
“Companies like ours need access to our global cash flows,” he said. “Today we’re at a disadvantage compared to our foreign competitors, and that’s the debate we should be having around inversions and our tax code.”
The US government has been scrutinizing so-called tax inversions, and Senator Ron Wyden, a democratic representative from Oregon, is proposing a bill that would make the process more difficult.
A congressional panel estimated this year that preventing future inversions would save US$19.5 billion in otherwise forgone tax revenue over the next 10 years.
Gonzalez said government action to stop tax inversions probably would not halt the Shire deal.
“We’ve looked carefully at that aspect and we believe its executable,” he said.
Every deal that gets done, though, puts pressure on the US government to act, said Brian Corvino, an analyst with Decision Resources Group.
In negotiations, Shire sought protection in case the US passes a law undercutting the tax gains and puts closing the deal at risk, said two people with knowledge of the matter.
The agreement calls for AbbVie to pay Shire a breakup fee of 3 percent of the deal’s value, about US$1.6 billion, or reimburse costs of not less than US$500 million, if the purchase falls through, according to the statement.
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
RSS