AbbVie Further Makes Case for Shire Acquisition; Shire Stands Firm in Rejecting

AbbVie issued a statement of June 25, 2014 to outline its case for acquiring the specialty pharmaceutical company Shire PLC. To date, AbbVie  has made three separate proposals to acquire Shire, with its most recent proposal made on May 30, 2014, for an indicative value of £46.26 ($78.53) for each Shire share in a cash and stock deal that represented £20.44 in cash and 0.7988 AbbVie shares per Shire share or approximately $46 billion. Shire has thus far rejected AbbVie’s overtures and issued a statement on June 25 to reiterate its rejection of AbbVie’s most recent proposal.

AbbVie Chairman and CEO Richard Gonzalez issued a statement to explain the benefits of a combination of the two companies and the strength of AbbVie as a merger partner. “AbbVie has delivered compelling growth and built a leading, independent biopharmaceutical company, delivering a 64% total return to shareholders since our inception. Our strategy positions us to deliver strong performance with a robust late-stage pipeline of multiple potential blockbuster medicines, including in oncology, our HCV [hepatitis C virus] regimen and daclizumab for multiple sclerosis. AbbVie's proven management team has delivered outstanding commercial execution, creating leadership positions for our products. This same team has a strong track record of successful M&A, licensing. and integration of assets into our business, accelerating their success. This combination would give us the opportunity to maximize the potential of Shire's rare disease and neuroscience franchises through our complementary platform, with established presence in more than 170 countries across the globe, and is further enhanced by the strength of our R&D in areas of high unmet need, and our commercial and manufacturing capabilities. We believe this highly executable proposed transaction will build long-term value for the patients, employees, and shareholders served by both companies and will grow our combined product portfolios and pipelines and deliver superior returns to shareholders.”

If the merger were to proceed, the new AbbVie group would operate under a new holding company, New AbbVie, and would retain operational headquarters in Chicago, as well as a strong presence in the United State and the UK. It is expected that New AbbVie would be incorporated in Jersey and have a UK tax domicile. New AbbVie will be listed on the New York Stock Exchange.

Abbvie said it is “willing to move quickly and cooperatively to engage with Shire with a view to achieving a transaction for the benefit of all shareholders.”

Shire responded to AbbVie’s statement to say: “Today's announcement by AbbVie contains no new proposal and provides no material new information. The board of Shire has already considered this proposal in detail and unanimously rejected it, concluding that it fundamentally undervalued the company and its prospects. Shareholders are strongly advised to take no action in relation to the proposal.”

Source: AbbVie and Shire

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