AbbVie, Shire Could Be Casualty in Treasury Crackdown

The transcript discusses the impact of Jack Lew's tax rule changes on corporate deals, particularly focusing on AbbVie's reconsideration of its deal with Shire. The announcement led to a significant drop in Shire's shares, surprising investors. Companies are reassessing deals due to the new tax implications, with the Treasury Department aiming to limit inversions. The Treasury's actions, including restrictions on hopscotch loans, are part of broader efforts to make such deals less attractive.

What was the immediate effect of Jack Lew's announcement on AbbVie's deal with Shire?

• The Treasury Department approved the deal.

• The deal was finalized.

• Shire's shares increased significantly.

• AbbVie decided to reconsider the deal.

How did the market react to the news about AbbVie and Shire?

• Investors were not surprised by the news.

• The market remained stable.

• AbbVie's shares increased significantly.

• Shire's shares saw the biggest drop in 12 years.

What is the potential financial consequence if the AbbVie-Shire deal is terminated?

• A $2 billion compensation to Shire.

• No financial consequence.

• A $500 million penalty.

• A $1.6 billion breakup fee.

What was one of the measures introduced by the Treasury to limit inversions?

• Allowing unlimited foreign earnings access.

• Increasing corporate tax rates.

• Introducing restrictions on hopscotch loans.

• Providing tax incentives for mergers.

What was the Treasury's main goal in changing the tax rules?

• To make inversions less financially attractive.

• To encourage more corporate inversions.

• To increase foreign investments.

• To support the AbbVie-Shire deal.