Friday 6 December 2019

Shire to move HQ to Jersey from Dublin as deal agreed

Flemming Ornskov, chief executive officer of Shire Plc
Flemming Ornskov, chief executive officer of Shire Plc

Paul Sandel

Dublin-based Shire will move its notional headquarters to Jersey after US drugmaker AbbVie agreed to buy the company 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.

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 60pc 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 in the Channel Islands, which will pay an effective tax of about 13pc, sharply less than its current rate of about 22pc, 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 Britain's AztraZeneca, though its $118bn deal was rejected.

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

Separately, Shire raised its earnings guidance for the year to low-to-mid 30pc growth, from mid-to-high 20pc growth. The company, which also produces hyperactivity drug Vyvanse, reported record second sales of $1.5bn.

Irish Independent

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