AbbVie Inc (NYSE:ABBV) and Shire PLC (ADR) (NASDAQ:SHPG) (LON:SHP) announced this morning that AbbVie has agreed to pay about $54 billion for Shire. This is the largest acquisition this year to date. Shire’s board of directors reversed the position they held earlier this week when they were opposed to the takeover.

Details on AbbVie Inc (ABBV)’s takeover of Shire PLC (ADR)

The offer is for cash and stock and places a value of around $91.06 (£53.19) per share on Shire’s stock. That’s over 50% higher than Shire’s closing price in May before it was revealed that AbbVie was pursuing the U.K. drug maker. A joint statement from both pharmaceutical companies indicates that current Shire shareholders will own about 25% of the merged company after the deal closes.

Abbvie Inc ABBV Shire

Shire investors will receive $41.82(£24.44) and .89 shares of the combined company for each share of Shire they own. The new AbbVie shares will have a listing on the New York Stock Exchange. If the deal doesn’t close, AbbVie said it will pay Shire $500 million or more as a breakup fee.

Shire finally gives in to AbbVie

AbbVie has been pursing Shire for a couple of months, making five offers in the process, with the goal of reincorporating in the U.K. so that it can reduce its tax bill. As The New York Times reports, this deal is the biggest ever merger that’s being done with a goal of inversion. Many U.S. companies are looking for takeover targets overseas that will enable them to move their base of operations and get a lower corporate tax rate.

AbbVie Inc (NYSE:ABBV) CEO Richard A. Gonzalez said in a statement today that the new company will be diversified and that they will get “enhanced access to cash” that they can use to not only pay for future mergers and acquisitions but also expand their drug portfolio. The merger will bring all of Shire’s products, including the ADHD drug Adderall, under the same roof as AbbVie’s drugs, which include the arthritis drug Humira. AbbVie has been seeking other sources of revenue because Humira loses patent protection in 2016.

The combined company is expected to have approximately $25 billion in annual sales.