Shire plummets 25% on takeover U-turn as pharmas drag FTSE down

The UK's pharmaceutical sector dragged the FTSE deep into the red this morning after US giant AbbVie said it is reconsidering the planned takeover of Shire, casting doubts over elevated share prices.

AbbVie agreed a takeover of UK-listed Shire for $54bn this summer, but is now reconsidering this plan after the US Treasury moved to restrict 'tax inversion' deals last month. The new tax crackdown will make the takeover far less lucrative for the US-based pharmaceutical, as it will no longer be able to take advantage of lower corporate tax rates in the UK. In a statement issued this morning, AbbVie said its board of director will meet next week to reconsider the proposed deal. Shire said it wants the takeover to proceed as planned. Shire was the biggest faller on the FTSE 100 this...