Twitter has filed a lawsuit against Elon Musk in an effort to force the world’s richest man to honor his agreement to purchase the social media site. Musk is attempting to terminate the $44 billion deal last week amid concerns about bots and spam accounts on the site. If Twitter doesn’t win its argument, there is a chance it may still be able to collect a $1 billion breakup fee from the Tesla CEO, but it won’t be the priciest payday. Here are some of the biggest breakup fees ever paid in this week’s Five for Friday.
#5: Pfizer & Allergan
Pharmaceutical giant Pfizer had to pay a $150 million in breakup fees after its $160 billion takeover of Ireland-based Allergan didn’t come to fruition. These fees are generally in the range 1-3% of the overall deal, so it’s clear Pfizer got a bargain at the end of the day. Pfizer planned to use the merger to move to Ireland for tax relief, but new rules on tax inversion from the U.S. Treasury caused Pfizer to walk away from Allergan, best known as the maker of Botox.
#4: Hillshire Brands & Pinnacle Foods
The relationship between Hillshire Brands and Pinnacle Foods lasted just a few weeks in 2014. Before the two could tie the knot, Hillshire’s board of directors got cold feet in the $4.3 billion deal and Pinnacle received a $163 million breakup fee for their trouble. Hillshire was the subject of a bidding war at the time and instead of buying Pinnacle, it was acquired by Tyson Foods for $8.55 billion.
#3: Nvidia & Softbank
Nvidia couldn’t quite seal the deal when the graphics processor maker tried to buy microprocessor designer Arm from Softbank. The $40 billion acquisition didn’t stand a chance after facing antitrust concerns immediately after the announcement. In the end, both sides walked away with something: Nvidia with a 20-year license for Arm’s intellectual property, and Softbank with a $1.25 billion breakup fee.
#2: AbbVie & Shire
Big Pharma rears its head once again after AbbVie’s $55 billion bid to buy Adderall-maker Shire didn’t cross the finish line. It was a very similar situation to what happened with Pfizer and Allergan, as AbbVie’s board worried it wouldn’t be able to get the tax break it was looking for by reincorporating in the U.K. AbbVie ended up parting with a $1.64 billion breakup fee. In a twist, in 2020 AbbVie completed the acquisition of Allergan after Pfizer backed out years prior.
#1: AT&T & T-Mobile
The most expensive breakup fee ever came from AT&T as the communications giant tried to buy T-Mobile in 2011. Investigations into monopolistic activities sank the $39 billion deal after regulators said AT&T would have to sell off a good chunk of T-Mobile’s business to gain approval. AT&T ended up shelling out a $4 billion breakup fee, which accounted for more than 10% of the overall transaction, and came away with nothing to show for it.
