AbbVie Inc. announced that it reached an agreement over the acquisition of Shire Plc in a cash-and-stock deal valued at about 32 billion pounds (54.8 billion dollars). This is how AbbVie became the latest U.S.-based health-care company that has preferred to move its tax residence outside the U.S.
The two companies made a joint statement today, revealing that the investors of Shire will get cash and stock valued at 52.48 pounds per share. The price of the deal is 53% higher than the closing level of Shire on May 2nd, right before the first AbbVies offer was made.
The board of directors of Shire supported AbbVies bid of 24.44 pounds in cash and 0.8960 of AbbVie shares per each Shire share. When the deal is finalized, Shires investors would end up with about 25% of the combined company.
The new combined company will have U.K. residence after the merger is finalized. AbbVie Inc. is to benefit from the lower corporate tax rate, which is considered part of the recent health-care companies strategy to take advantage of European takeovers in order to decrease their taxes.
In addition, the takeover of Shire is also part of AbbVie Inc.s attempt to become less reliable on its arthritis drug Humira, which is to lose its U.S. patent protection in 2016. Currently, Humira is considered the best selling medicine in the world and is also reliable for generating about 60% of the companys total revenue.
One of the analysts, who work at UBS AG – Guillaume van Renterghem – commented on the acquisition for Bloomberg: “It’s very, very sweet for Shire. The beauty of this AbbVie-Shire deal is that everybody gets out of this deal in even better shape than they entered it.”
AbbVie Inc. was 0.24% down to close at 53.52 dollars per share yesterday, marking a one-year change of +21.75%. According to the information published on CNN Money, the 8 analysts offering 12-month price forecasts for AbbVie Inc have a median target of 61.00, with a high estimate of 69.00 and a low estimate of 50.00. The median estimate represents a +13.98% increase from the last price of 53.52.
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