Busines digest: Drugmaker AbbVie closes deal to avoid taxes

July 18
NEW COMPANY
Drugmaker closes deal to avoid taxes

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

Markets
Stocks close higher for the week

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.

— Reuters

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