"Together, the companies would be projected to deliver $20 billion in product sales by 2020, with the financial and operational firepower to fuel further innovation and growth in rare diseases," Shire CEO Flemming Ornskov said in a press release on Tuesday
"We believe the proposed combination of Shire and Baxalta would be strategically and financially attractive for both of our companies, accelerating our respective growth ambitions and creating the leading global biotech company in rare diseases," he added.
Reports suggest that Ornskov went public with the bid only after the Baxalta board failed to engage in takeover discussions.
Shares of Baxalta rose 12% on Tuesday on the news, while Shire's stock fell 5.4%.
If the deal went through, Baxalta shareholders would be left with around 37% of the new company.
The pharmaceuticals merger would provide an attractive tax incentive for Baxalta, which would see its tax rate drop thanks to Shire's Irish address. Takeovers by foreign companies have been rife in the pharmaceutical industry, despite efforts of U.S. lawmakers to retain the corporate-tax revenue.