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State and Nation Business

AbbVie, Shire agree on $55B combination

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 currently is incorporated. But the new company will be controlled by shareholders of North Chicago-based AbbVie, who will own about 75 percent of the new company's stock.

Shire shareholders will receive cash and stock valued about $91.07 for each of their shares. They then will hold the remaining 25 percent stake in the new company.

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 Barack Obama and members of Congress because they cost the U.S. billions of dollars in tax revenue.

At 35 percent, the U.S. has the highest corporate income tax rate in the industrialized world, and it also taxes income that is earned in another country and then brought home. That causes some companies to park millions of dollars in overseas accounts.

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