AbbVie secures £13.5 billion bridge facility to fund merger with Shire

By Lisa Kerner

Charlotte, N.C., July 18 – AbbVie Inc. entered into a £13.5 billion bridge credit agreement with JPMorgan to help fund its acquisition of Shire plc, it was announced on Friday.

Shire shareholders will be entitled to receive £24.44 in cash and 0.8960 of New AbbVie shares for each Shire share for a total value of £52.48 per Shire share based on AbbVie’s closing share price of $53.52 on July 17.

AbbVie stockholders will receive one New AbbVie share for each AbbVie share.

New AbbVie will become the holding company of the Shire Group and the AbbVie Group.

Financing

AbbVie entered into a bridge credit agreement with JPMorgan for a bridge facility consisting of up to £9.1 billion of tranche 1 commitments, £3.2 billion of tranche 2 commitments and £1.2 billion of tranche 3 commitments, according to a form 8-K filed with the Securities and Exchange Commission. JPMorgan is administrative agent and sole arranger and bookrunner.

Proceeds will be used for the cash consideration of the transaction.

Borrowings under the bridge credit facility will be at Libor plus a margin of 62.5 basis points to 150 bps, depending on AbbVie’s credit rating. The commitment fee will range from 6 to 17.5 bps, again depending on AbbVie’s credit rating.

Tranches 1 and 2 will mature 364 days after closing while tranche 3 will mature 60 days after closing.

The tranche 1 and 2 commitments will terminate in full on July 31, 2015.

The combination is expected to be implemented by a scheme of arrangement and is slated to close in the fourth quarter of 2014.

AbbVie plans to maintain a strong commitment “to a growing dividend and to implement a significant share repurchase program” following the transaction’s close, according to a company news release.

AbbVie is a global, research-based biopharmaceutical company formed in January 2013 following separation from Abbot Laboratories. The company is based in Abbott Park, Ill.

Shire is a biopharmaceutical company based in Dublin with a registered office in St. Helier, Jersey.

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