LONDON: Shire Pharmaceuticals has accepted a £32-billion ($54bn) takeover bid from AbbVie, the two companies announced on Friday, in a deal aimed at slashing the US giant’s tax bill.

The takeover, priced with a 53-per cent premium for Shire stock, comes after Ireland-based Shire reversed its opposition to a deal earlier this week.

“The boards of AbbVie and Shire are pleased to announce that they have reached agreement on the terms of a recommended combination of Shire with AbbVie,” the two firms said in a statement. The offer, comprising £24.44 in cash and 0.8960 AbbVie share per Shire share, is the same as the proposal received by the group last Sunday.

The companies added that the bid was worth the equivalent of £53.19 per Shire share, which represents a premium of 53pc to the closing share price on May 2, one day before AbbVie’s initial proposal.

The deal was expected to reduce AbbVie’s effective tax rate to about 13pc by 2016, according to the statement. Nearing midday in London, Shire’s share price jumped 1.66pc to £48.86 on the capital’s FTSE 100 index, which was down 0.41pc in value.

Published in Dawn, July 19th , 2014