EC Oks 'dead' Abbvie-Shire takeover deal

By Gareth Macdonald

- Last updated on GMT

Related tags European union

EC OKs deal described as "likely dead" by analysts
EC OKs deal described as "likely dead" by analysts
Great news Abbvie; the European Commission (EC) has no problem with you buying Shire. 

The Commission announced its decision last night​ explaining that a single firm owning the monoclonal antibody (mAb) biopharmaceutical Humira and the small molecule pill Mezavant, both of which treat ulcerative colitis (UC), raised no competition concerns.

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Shire Inc. of Ireland by AbbVie Inc. of the US. AbbVie is a biopharmaceutical company active worldwide in the discovery, development, manufacture and sale of pharmaceutical products​.”

Unfortunately for the EC, which began reviewing the deal in mid-September​, the approval comes a few hours after AbbVie executives decided buying Shire no longer made sense and advised shareholders accordingly.

The change of heart was prompted by US Department of Treasury changes to tax rules.

“Although the strategic rationale of combining our two companies remains strong, the agreed upon valuation is no longer supported as a result of the changes to the tax rules and we did not believe it was in the best interests of our stockholders to proceed,”​ AbbVie’s CEO Richard Gonzalez said in a statement.

The tax rules affect the deal in a “significant manner,”​ the company said, eliminating a number of financial benefits including the ability to access current and future global cash flows efficiently.

Though there is still a chance a merger could happen, the “transaction is likely dead,”​ Jefferies analyst Peter Welford said in a note. 

“The withdrawal of recommendation does not itself "kill" the merger, but we believe it is likely both parties may now agree with the UK Takeover panel to let the agreement lapse.”

The commission’s conclusion “the transaction would not raise competition concerns since Mezavant and Humira do not compete with each other​” would only be considered consolation by the most charitable observer.

According to various reports, AbbVie’s decision to pull out of the Shire deal is likely to cost around $1.6bn.

Related news

Show more

Related products

Trends in Biopharmaceutical Raw Material Selection

Trends in Biopharmaceutical Raw Material Selection

Actylis – The Partner of Choice | 31-Jan-2023 | Business Advice

Join us as our in-house experts, along with Cecile Bellamy from Pfizer, discuss current and future trends in biopharmaceutical raw material selection.

Liposomal and Nanoparticle Technology

Liposomal and Nanoparticle Technology

Pfizer CentreOne | 18-Nov-2022 | Technical / White Paper

Medical science is continuously searching for better ways to administer drugs into the body and to maximize the therapeutic effectiveness of the drugs...

The Reagents Behind Much of Molecular Biology

The Reagents Behind Much of Molecular Biology

Thermo Fisher Scientific | 25-Jul-2022 | Case Study

The ability to amplify, modify and fabricate DNA is fundamental to modern molecular biology. Why do so many researchers take their constituent parts for...

Related suppliers

Follow us


View more