The drugmaker AbbVie has reached a deal worth roughly $55 billion to combine with British counterpart Shire and become the latest U.S. company to seek an overseas haven from tax rates back home.
The companies said Friday they will create a new company that is incorporated on the British island of Jersey, where Shire is incorporated. But the new company will be controlled by shareholders of North Chicago, Illinois-based AbbVie, who will own about 75 percent of the new company’s stock.
U.S.-based companies looking to grow through acquisitions have been searching more fervently in recent years for these overseas combinations known as inversions. But the deals are drawing growing concern from President Obama and members of Congress because they cost the United States billions of dollars in tax revenue
— Associated Press
U.S. stocks rose Friday, rebounding a day after the S&P 500 suffered its worst slide since April 10, with the three major indexes closing higher for the week.
Technology stocks ranked among the day’s biggest gainers. Google led the rally. Its stock jumped 4.2 percent to $605.11 a day after the No. 1 Internet search company reported second-quarter results that beat investors’ expectations. Shares of Facebook gained 3 percent.
Market participants kept geopolitical news in focus. President Obama demanded that Russia stop supporting separatists in eastern Ukraine a day after the downing of a Malaysian airline by a surface-to-air missile, which he said was fired from rebel territory. The incident raised the prospect of more U.S. sanctions on Moscow.
For the week, the Dow Jones industrial average climbed 0.9 percent, the S&P 500, a broader measure of stocks, rose 0.5 percent and the tech-heavy Nasdaq gained 0.4 percent.
● Visa and MasterCard lost out on their request Friday to have a judge to dismiss antitrust lawsuits filed against the credit card companies by retailers. Companies such as Target and Amazon.com have accused Visa and MasterCard of fixing the fees charged to merchants each time their customers used credit or debit cards. They also alleged the two companies prevented merchants from steering customers to cheaper forms of payment.
● A federal judge in New York has granted prosecutors access to a Gmail user’s e-mails as part of a criminal probe, a decision that could fan the debate over how aggressively the government may pursue data if doing so may invade people’s privacy.
U.S. Magistrate Judge Gabriel Gorenstein said Friday he had authorized a warrant to be served on Google for the e-mails of an unnamed individual who is the target of a money-laundering investigation.
Gorenstein said his decision ran counter to several other judges’ rulings in similar cases that sweeping warrants give the government improper access to too many e-mails, not just relevant ones. But he said the law lets investigators review broad swaths of documents to decide which are covered by warrants.
● Mitsubishi Motors is recalling cars made with Takata air bags in four areas with high humidity. “Due to NHTSA’s belief that humidity is a contributing factor to the inflator condition at issue, the (recall) will be limited to affected vehicles that are registered in, or were originally sold in Florida, Hawaii, Puerto Rico, and the U.S. Virgin Islands,” Mitsubishi said in a letter to U.S. officials. Mitsubishi is one of nine automakers to say it will conduct a recall that includes those areas. In the past five years, about 12 million vehicles with Takata air bags or inflators have been recalled.
● General Electric ’s credit card unit, Synchrony Financial, said it expects to raise up to $3.25 billion in a public offering of shares, in what is expected to be the biggest U.S. IPO by a financial company this year. The offering of 125 million shares is expected to be priced at between $23 and $26 per share, the company said in a filing with the Securities and Exchange Commission on Friday.
● The Obama administration took a step toward allowing oil and gas drilling off seven Atlantic Coast states for the first time in decades, establishing guidelines for seismic testing that would gauge offshore reserves.
The decision Friday doesn’t authorize the tests, which are done by ships towing guns that blast high intensity sound waves into the water. The Interior Department will consider applications for testing in light of safety standards to mitigate risks to ocean life, the head of the agency’s Bureau of Ocean Energy Management said.
Environmental groups criticized the action, saying tests could lead to drilling in a region that has been off-limits to oil exploration since the early 1980s and would pose serious risks to species that include sea turtles and the right whale.
● Alibaba Group Holding, the Chinese e-commerce titan gearing up for a mammoth U.S. initial public offering, has reported a blackmail attempt by a media organization to police, the company said Friday on its official microblog. Alibaba said on its Weibo microblog that the media organization sought $300,000 to suppress a negative report about the company. Alibaba said the matter had been reported to police in Hangzhou, where the firm is based. Alibaba’s listing on the New York Stock Exchange could be one of the biggest initial public offerings. The company, founded by Jack Ma, is looking at a September debut, a source told Reuters on Thursday.
— From news services