AbbVie has finally struck a deal to acquire Shire in a deal valued at £32 billion.

After a long courtship, AbbVie is paying about £52.48 per share, comprising  £24.44 pounds in cash and 0.8960 new AbbVie shares. It represents a premium of 53% to the price of Shire stock on May 2, the last day prior to AbbVie's initial proposal and Shire shareholders will have a 25% stake in the new firm.

A separate entity, New AbbVie, has been formed in Jersey, which will result in significant tax savings, reducing the rate to about 13% by 2016. Getting the deal signed off as quickly as possible is a priority given that the US government is looking to prevent the growing number of tax-inversion mergers.

AbbVie chief executive Richard Gonzalez said that “we’re creating a unique, diversified biopharmaceutical company” which will benefit from “a best-in-class product development platform, a stronger pipeline and more enhanced R&D capabilities”. He added that “the combination would provide us with enhanced access to cash that we can use to expand our portfolio and fund M&A to supplement organic growth”.

Shire chairman Susan Kilsby said “we believe that this offer reflects the substantial value that we have already created for Shire’s shareholders and the strength of our future prospects”. She added that the combined group “represents an exciting fit of two complementary businesses that will create a new market leader in specialty pharmaceuticals”.