AbbVie increases offer for Shire to $51B

SHARE AbbVie increases offer for Shire to $51B

AbbVie Inc. on Tuesday increased its offer for drugmaker Shire to about $51 billion in cash and stock.

“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,” AbbVie chairman and CEO Richard 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.”

The North Chicago-based drugmaker increased its cash-and-stock offer by about 11 percent to $87.46 per share, up from $79.13 per share.

Irish drugmaker Shire has, so far, spurned AbbVie’s takeover bids. Chairman Susan Kilsby said AbbVie’s offers “fundamentally undervalued” the company.

Part of AbbVie’s motivation in pursuing Shire is the company could shift its corporate headquarters to Europe, substantially lowering its corporate income tax burden. AbbVie said it expects the combined company to pay a tax rate of about 13 percent, down from its current rate of roughly 22 percent.

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.

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