Published: Wed, May 09, 2018
Global Media | By Jackie Banks

Takeda Pharmaceutical to buy larger Irish rival Shire for $62 bn

Takeda Pharmaceutical to buy larger Irish rival Shire for $62 bn

The agreement offers US$30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda American depositary receipts.

The final deal is about 46 percent cash and 54 percent stock, leaving Shire shareholders owning about half of the combined company.

"Shire's highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda", said Takeda CEO Christophe Weber.

In a separate statement, Takeda said it would fund the deal with a bridge loan facility of almost US$31 billion.

The boards of both companies announced Tuesday morning that they had reached a deal after Takeda raised the amount of cash in the offer it made two weeks ago.

It seems Takeda has finally managed to win Shire over, as the UK-based pharmaceuticals giant today unanimously recommended that its shareholders approve Takeda's offer. Takeda is valued at about $34 billion and makes nearly half of its sales in Asia, and about a third in the U.S. Among its top sellers are Entyvio, used to treat ulcerative colitis, and cancer drug Leuprorelin.

The companies eventually expect to realize about $1.4 billion in annual cost savings from combining, the majority of which will come from reducing duplicative functions in sales and marketing, Takeda said.

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The transaction gives Takeda, a maker of cancer and gastroenterology drugs, greater access to the USA market, while Shire will get greater exposure in Japan and emerging markets.

Takeda has focused on developing and commercialising innovative therapies that address unmet clinical needs in gastroenterology, oncology and neuroscience plus vaccines.

The Japanese company has a market value of just $33 billion, stoking fears about how much debt it will have to take on to fund the acquisition.

Analysts say Takeda is eager to acquire Shire in order to boost its global presence and get hold of its portfolio of rare disease medicines, which have high profit margins.

Post closing, the New Takeda Shares will be listed on the Tokyo Stock Exchange and the Local Japanese Stock Exchanges. Takeda's largest previous purchase was a US$13.7 billion takeover of Nycomed in 2011.

Shire has offered Takeda a large presence in the USA and an expertise in the rare diseses. Last year Weber bought US cancer specialist Ariad Pharmaceuticals for $5 billion.

Takeda said it would maintain its headquarters in Japan and would evaluate consolidating Shire's operations into Takeda's in the Boston area, in Switzerland and in Singapore.

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