US drug giant wins long battle for Shire

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US drugmaker AbbVie bought Dublin-based Shire yesterday in a £32bn deal that will allow it to slash its tax bill by relocating to Britain.

The London-listed company, which makes expensive medicines to treat rare diseases, fought off four earlier bids from AbbVie until the US firm raised its price to £52.48 per share – made up of £24.44 in cash and 0.8960 new AbbVie shares.

Chicago-based AbbVie is buying Shire to cut both its US tax bill and its reliance on arthritis drug Humira, the world’s top selling medicine which loses US patent protection in 2016.

AbbVie, which generates nearly 60 per cent of its revenue from Humira, had until yesterday 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 per cent, sharply lower than its current rate of about 22 per cent, making the deal one of the biggest driven by the tactic known as tax inversion.

America’s Pfizer tried a similar tactic earlier this year when it made a bid for AztraZeneca though its $118bn deal was rejected.

Shire’s board had said on Monday it was ready to recommend the higher offer from AbbVie, signalling the end of a lengthy courtship.