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.

Salix Pharmaceuticals has agreed to buy the patents to some drugs for gastrointestinal diseases from Cosmo Pharmaceuticals for about $2.7bn (€1.98bn) in stock in a deal that will allow the US company to move to Ireland and lower its tax bill.