The British drug giant made a $2.6 billion friendly bid for HGS in April, but that was rejected by the American research firm. Glaxo then declared its intention to acquire the company through a hostile takeover in May.
Now the companies have agreed to a merger. And GlaxoSmithKline has raised its price, the Associated Press notes.
GlaxoSmithKline will pay $14.25 a share, up from an earlier offer of $13 a share, for HGS, bringing the total cost of the acquisition to $3.6 billion.
HGS had threatened to launched a “poisoned pill” defense against the takeover.
The merger gives GlaxoSmithKline the rights to HGS’s lupus, diabetes and atherosclerosis drugs. The company said it expected to achieve $200 million in cost savings with the merger, which will begin to contribute to revenues within three years.
Shares of GlaxoSmithKline rose fractionally in Monday afternoon trading in New York.