News Column

COMPANIES: Postscript Yellen calls the shots: Drugs firm swallowed by US rival - few hurt

July 20, 2014

Nice work if you can get it. Shire, the pharmaceuticals group best known for its hyperactivity drugs for children and rare disease research, finally agreed to be snapped up by US group AbbVie.

As part of the pounds 32bn deal, Shire negotiated some mouthwatering retention payments. Chief executive Flemming Ornskov will get nearly pounds 6m to stay, on top of a possible pounds 21m windfall from shares and options. Another 30 senior employees will get around pounds 14m between them if they stay.

The FTSE 100 business also negotiated a break fee of about pounds 960m if the deal fell through. Not a bad idea, since part of the rationale for AbbVie was a switch of domicile to cut its tax bills, something the US government is planning to clamp down on.

Strangely, despite growing political concern at UK companies being taken over by foreign rivals, the Shire deal has not caused as much controversy as Pfizer's unsuccessful tilt at AstraZeneca. Probably something to do with the fact that Shire only employs about 500 people in the UK. And that it is based in Dublin for, yes, tax reasons.


Shire sweetened the pounds 32bn takeover pill.

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Source: Observer (UK)

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