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The London-listed company, which makes expensive
medicines to treat rare diseases, fought off four earlier bids
from AbbVie until the U.S. firm raised its price to 52.48 pounds
per share - made up of 24.44 pounds in cash and 0.8960 new
AbbVie shares.
Chicago-based AbbVie is buying Shire to cut both its U.S. tax
bill and its reliance on arthritis drug Humira, the world's top
selling medicine which loses U.S. patent protection in 2016.
AbbVie, which generates nearly 60 percent of its revenue from
Humira, had until Friday to announce a firm offer for Shire,
extend the deadline or walk away under UK takeover rules.
It now plans to create a combined company incorporated in
Jersey, the Channel Islands, which will pay an effective tax of
about 13 percent, sharply lower than its current rate of about
22 percent, making the deal one of the biggest driven by the
tactic known as tax inversion.
America's Pfizer Inc tried a similar tactic earlier this year
when it made a bid for Britain's AztraZeneca plc though its $118
billion deal was rejected.
Shire's board had said on Monday it was ready to recommend the
higher offer from AbbVie, signaling the end of a lengthy
courtship.
AbbVie's agreed price represents a premium of about 53 percent
to Shire's share price on May 2, the last business day before
AbbVie's first offer, which was rebuffed by Shire.
Shares in Shire, which will own about 25 percent of the combined
group, rose 1.9 percent to 48.99 pounds by 1027 GMT on Friday
after the agreed deal was announced.
Separately, Shire raised its earnings guidance for the year on
Friday, to low-to-mid 30 percent growth, from mid-to-high 20
percent growth. The company, which also produces hyperactivity
drug Vyvanse, reported record revenue of $1.5 billion for its
second quarter and a 42 percent jump in its preferred earnings
measure of non-GAAP adjusted earnings per ADS to $2.67.
Commenting on the final takeover deal, AbbVie chairman and chief
executive Richard Gonzalez said the combination would have a
best-in-class product development platform, a stronger pipeline
and better R&D capabilities.
"The combination of AbbVie and Shire is attractive for
shareholders of both companies," he said.
Shire was advised by Goldman Sachs, Morgan Stanley, Deutsche
Bank, Evercore and Citi, while AbbVie was advised by J.P.Morgan.
($1 = 0.5847 British Pounds)
(Editing by Sophie Walker)
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