After AbbVie improves its offer to around £32bn
Dublin-based pharmaceutical company Shire has accepted AbbVie's takeover bid of around £32bn after the company improved its offer.
Shire's directors had rejected four previous bids from the Chicago, US-based company.
The successful bid represents a premium of 53% against the share price of £34.67 on 2 May, the last business day prior to AbbVie's initial proposal.
For each share they held in Shire, investors will receive £24.44 in cash plus 0.8960 New AbbVie shares, equating to £52.48 per Shire share based on AbbVie’s closing share price of $53.52 on 17 July, or £53.19 per Shire share based on AbbVie's 30-day volume-weighted average price of $54.83 to 17 July.
The companies said the deal would create 'a well-positioned and focused speciality biopharmaceutical company, with sustainable leadership positions within areas of unmet need, including immunology, rare diseases, neuroscience, metabolic diseases and liver disease (HCV) and multiple emerging oncology programmes'.
After completion, AbbVie shareholders will hold 75% of New AbbVie shares, with Shire investors holding 25%.
By combining AbbVie and Shire, we’re creating a unique, diversified biopharmaceutical company
The AbbVie board also expects the transaction to reduce New AbbVie’s effective tax rate to approximately 13% by 2016, compared with its current rate of approximately 22% as AbbVie would redomicile in the UK.
AbbVie believes that a potential re-rating of New AbbVie is possible due to continued strength in its Humira franchise (the world's top selling medicine globally in 2013), the launch of a HCV therapy, advancement of late-stage opportunities in oncology, immunology and other areas, and Shire's complementary rare disease and neuroscience platform.
Commenting on the proposed merger, Richard Gonzalez, Chairman and Chief Executive of AbbVie said: 'By combining AbbVie and Shire, we’re creating a unique, diversified biopharmaceutical company. The combined company would benefit from a best-in-class product development platform, a stronger pipeline and more enhanced R&D capabilities. The combination of AbbVie and Shire would provide us with enhanced access to cash that we can use to expand our portfolio and fund M&A to supplement organic growth.'
Susan Kilsby, Chairman of Shire, said: 'Shire has a long track record of delivering value for both shareholders and patients. Our growth profile has been accelerated under our new management team who have successfully executed a focused strategy.
'We believe that this offer reflects the substantial value that we have already created for Shire’s shareholders and the strength of our future prospects. We believe that the combined group represents an exciting fit of two complementary businesses that will create a new market leader in speciality pharmaceuticals with a portfolio of fast growing products, a promising pipeline and enhanced growth prospects.'