Abbvie to reconsider Shire bid in light of new US Treasury rules

US pharmaceutical giant Abbvie is having second thoughts regarding its planned $54bn acquisition of London-listed rival Shire.

The company has announced that its board will meet by next week to consider whether to withdraw or modify the proposed deal in light of the US Treasury’s new rules regarding the takeover of foreign companies.

Among other things, the company said it will study "the impact of the US Department of Treasury's proposed unilateral changes to the tax regulations announced on 22 September, 2014, including the impact to the fundamental financial benefits of the transaction."

Should the deal finally fall through it would mark the largest transaction to go under as a result of the moves by the US Treasury.

The shares of other companies which might have been benefiting from foreign investors' interest, such as AstraZeneca and Smith&Nephew, were also moving lower early on Wednesday morning.

Shire issued a statement in response to the above news saying it believes Abbvie should follow through on its offer, while highlighting that the agreed break-up fee is of $1.64bn.

The board of Shire will meet in due course and make an announcement, the company said.

As of 08:13 stock in Shire was plummeting by 27.06% to 3,749p.