AbbVie faces $1.64bn ‘break-up’ fee for ditching Shire takeover plan over changes to US tax rules

US drugmaker AbbVie has pulled the plug on its plan to buy Dublin-based Shire, recommending shareholders vote against the planned $55bn (€42.96bn) takeover after new US tax rules.

Shire stands to be paid a break-up fee of about $1.64bn if AbbVie’s shareholders follow the advice and reject the transaction.

The reversal, which had been anticipated after Chicago-based AbbVie said it was reconsidering the deal, hands a major scalp to the US Treasury, which has been fighting to make tax-avoiding acquisitions more difficult.