DRUGS firm Shire has been valued at £32 billion after its board finally succumbed to a takeover approach from US rival AbbVie.
The group, which employs 5,300 people in 29 countries, will merge its operations with AbbVie – the maker of rheumatoid arthritis treatment Humira – as long as shareholders approve the tie-up later in the year.
Shire investors will receive cash and AbbVie shares valued at about 5,319p for each share they hold in the firm, which was founded in 1986.
AbbVie shareholders will end up owning 75 per cent of the enlarged group, which will be incorporated in Jersey, where Shire has its registered office.
Listed on the London Stock Exchange, Shire has its tax base in Dublin and sells most of its products in North America.
Illinois-based AbbVie’s pursuit started in May, at the time as AstraZeneca was fighting off interest worth £69bn from Viagra maker Pfizer.
The pharmaceuticals sector has seen a raft of deal-making activity in recent months as US companies look to Europe as a way to reduce their tax liabilities. AbbVie is keen to move its domicile to the UK in a move that would cut its corporate tax rate, and while chairman and chief executive Richard Gonzalez, pictured, said this would be “clearly a benefit”, it was not the main reason behind the deal.
He added: “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 research and development capabilities.”
In an e-mail to staff, Gonzalez said the enlarged group would have a combined workforce of about 30,000 people and a market value of $137bn (£80.3bn).
He added: “The companies have complementary strategies, both focused on creating leadership positions within areas of high unmet medical need. Both businesses have complementary areas of strength, rather than overlap.”
AbbVie had until yesterday to confirm an offer for its British target, having increased its offer price from 4,626p a share in May to a cash and shares proposal worth 5,319p a share, equivalent to about £32bn.
Shire chairwoman Susan Kilsby said: “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 market leader in specialty pharmaceuticals with a portfolio of fast-growing products, a promising pipeline and enhanced growth prospects.”
In 2008, Shire incorporated itself in Jersey and moved its tax base to Dublin, where the corporation tax rate is 12.5 per cent.
For a number of years before that, its main operational base was in the US state of Pennsylvania.