AbbVie Inc. and Shire Plc are negotiating toward a merger after AbbVie this week raised its bid for the UK drugmaker to about $51.5 billion, Bloomberg reports.
AbbVie chief executive Richard Gonzalez met in New york with Shire officials for the discussions, Bloomberg said, citing sources.
North Chicago-based AbbVie has pursued Shire to broaden its product line as well as reduce its corporate tax burden by shifting its legal headquarters to the United Kingdom. AbbVie has said it expects the combined company to pay a tax rate of about 13 percent, down from its current rate of roughly 22 percent.
AbbVie this week increased its offer 11 percent to $51.5 billion. Shire has twice before rejected AbbVie bids as being too low.
“This transaction is a combination of two leading companies with leadership positions in specialty pharmaceuticals that would create a global market leader with unique characteristics and a compelling investment thesis,” Gonzalez said in a filing Tuesday with the U.S. Securities and Exchange Commission.
“AbbVie will bring greater financial strength and R&D experience to this combination that will enable both companies to reach their full potential for their shareholders and patients in need across the globe.”
Shire is known for developing rare-disease drugs. More than half of AbbVie’s sales come from Humira, a treatment for rheumatoid arthritis, whose patent is set to expire in 2016.
AbbVie increases offer for Shire to $51B
AbbVie cites tax break as a Shire deal motivator
