Markets

Japanese drug maker Takeda to buy Ireland's Shire in $62 billion deal

Japanese drug maker Takeda to buy Ireland's Shire in $62 billion deal

After several improved bids the board of Irish biopharmaceutical firm Shire agreed to a £46 takeover bid by Japanese drug maker Takeda which will propel it into the position of the world's largest drug maker in the rare diseases business.

Shares in Takeda closed up 3.99 percent at 4,638 yen just before the announcement, which had been widely expected, while in London trade Shire was up 4.77 percent at £40.40.

The combined company plans to complement Takeda's areas of therapeutic focus-namely oncology, gastroenterology, and neuroscience therapeutic areas plus vaccines-with Shire's strengths in rare diseases and other areas.

Takeda said it will launch a "review of the functions undertaken" at Shire's current headquarters in Dublin within the first year.

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 also would get increased exposure to the US, the world's biggest pharmaceutical market and where Shire generates most of its revenue.

Takeda Pharmaceutical Co.'s largest acquisition would catapult the company into the top 10 within the global pharmaceutical industry. It represents a 60% premium to the share price low from before Takeda confirmed its interest in a buy, he wrote in a Tuesday note to clients.

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Susan Kilsby, the chairwoman of Shire, said: "Over the last 30 years, Shire has become the global leader in treating rare diseases".

Under the terms of the acquisition, shareholders in Shire will be entitled to receive $30.33 in cash, a deal which values the entire share capital of the company at roughly £46bn. When the deal closes, Takeda shareholders would hold approximately 50 percent of the combined company.

The CEO of Takeda, Christophe Weber cites that jointly with the Shire, a stronger Takeda will emerge.

Takeda, meanwhile, has like many Japanese companies been expanding overseas to compensate for slowing growth at home. That deal, Shire said today, is expected to close in the second quarter or third quarter, with the net proceeds meant to be used to repay debt.

The deal is still subject to regulatory approvals as well as to the approval of Shire and Takeda shareholders, though Shire directors "intend to recommend unanimously" that its investors vote in favour of the acquisition. Last year, the company expanded its footprint in the USA oncology market with the US$4.7 billion purchase of Ariad Pharmaceuticals.


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