By Olivia Oran and Mike Stone
NEW YORK (Reuters) - U.S. drugmaker AbbVie Inc has recently approached London-listed Shire PLC about a potential takeover, according to people familiar with the matter, marking the latest attempt by U.S. healthcare companies looking to acquire overseas rivals partly to lower their tax rates.
AbbVie, which makes rheumatoid arthritis drug Humira, has a market capitalization of around $86 billion (£50.7 billion), while Shire has a market capitalisation of roughly $38 billion.
The companies have held talks in recent weeks following AbbVie's takeover approach, but there is no guarantee the discussions will lead to a transaction, the people said, asking not to be named because the matter is not public. Both parties have exchanged letters about a potential deal, the people said.
It is also possible that other suitors will emerge for Shire, the people added.
AbbVie said it does not comment on speculation and Shire could not be immediately reached for comment.
Founded in 1986 in Britain, Shire conducts most of its business in the United States and has been domiciled in Ireland for tax purposes since 2008. With its tax base in Ireland, where effective corporate tax rates are among the lowest in the world, Shire, with a mid-sized market value, has been seen as a prime takeover target for U.S. drugmakers.
Shire is weighing AbbVie's approach against the merits of remaining independent, as its chief executive Fleming Ornskov has only completed his first year on the job and has an alternative strategy of growing through acquisitions, one of the people said.
Shire specializes in medicines for attention deficit hyperactivity disorder (ADHD), which account for around 40 percent of its sales. The firm also sells pricey drugs to treat rare genetic disorders and is building up a portfolio of treatments in ophthalmology and other specialty disease areas.
AbbVie, based in North Chicago, Illinois, was founded last year as a spin-off from Abbott Laboratories. The company has been criticized for its overreliance on its top drug, Humira, which comprised over half of its revenue in the most recent quarter.
To lessen its reliance on Humira, the company is attempting to develop treatments for hepatitis C, cancer and other diseases.
Shire had also been approached by Allergan Inc in the months before the Botox maker itself became a takeover target for Valeant, Reuters previously reported.
That approach did not lead to serious discussions between the two parties and there are currently no talks with Allergan, Reuters reported earlier this week.
U.S. pharmaceutical companies are in a race to keep up with rivals and are looking at lowering their tax rates in order to do so, in what is called as an inversion. Recent inversion deals have included medical device company Medtronic Inc's $42.9 billion deal for Covidien this week, as well as Pfizer Inc's abortive $118 billion bid for AstraZeneca PLC.
Some U.S. lawmakers are concerned that the deals erode government revenue by giving corporations another tax-avoiding loophole. Two bills in the U.S. Congress and a White House proposal would make inversions harder to do, but neither has gained much traction.
(Reporting by Olivia Oran and Mike Stone in New York, additional reporting by Soyoung Kim; Editing by Chris Reese and Diane Craft)