Tuesday, 22 May, 2018

Takeda, a Japanese drug maker company to buy Shire at $62 billion

Shire PLC Shire PLC
| 09 May, 2018, 01:16

Shire investors will receive $30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda ADSs for each share, the companies said, valuing the offer at 48.17 pounds a share based on the latest price and exchange rate.

The CEO of Takeda, Christophe Weber cites that jointly with the Shire, a stronger Takeda will emerge. It represents a 60 per cent premium to Shire's closing price on March 27, before Takeda disclosed its interest.

Yet buying Shire is a stretch for the much smaller Takeda, which will borrow $30.85 billion from J.P. Morgan Chase, Sumitomo Mitsui, MUFG Bank and others to fund the takeover. The transaction has been approved by both companies' boards and values Shire at around $62 billion.

The boards of both firms have finally agreed on the terms of the deal, settling on an offer of £49.01 per Shire share. A Shire takeover brings Takeda treatments for rare diseases such as haemophilia - a field that is luring a growing number of drug makers who can charge more for unique life-saving drugs than for routine treatments.

Takeda's deal marks persistence by the Japanese firm, which tabled five offers by late April - one month after rumours of the deal hit headlines.

Shareholders of Takeda Pharmaceutical Co. and Shire Plc will each own about 50 percent of the merged company. Takeda had pitched a potential tie-up as complementary to its core therapeutic areas of oncology, gastrointestinal disease, and neuroscience.


"We can now go after targets and diseases that we couldn't previously", said Plump, who oversees Takeda's research and development operations, which are based in MA.

Susan Kilsby, chairman of Shire, added that by combining with Takeda, "Shire helps create an even stronger biopharmaceutical company, with a robust R&D pipeline and expanded global footprint".

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.

Takeda is the largest pharmaceutical in Japan.

Four previous approaches from Takeda had been rebuffed.

In a separate statement today, Takeda said it will continue to focus on growing its oncology portfolio, which along with its hematology holdings expanded past year when Takeda acquired Ariad Pharmaceuticals for $5.2 billion. It will also have "major" regional locations in Japan, Singapore, Switzerland, and the U.S.

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