Takeda Reaches Agreement To Acquire Shire For $62 Billion

09 May, 2018, 00:36 | Author: Regina Lloyd
  • JAPAN-IRELAND-PHARMACEUTICAL-TAKEOVER-SHIRE-TAKEDA

Takeda, founded in Osaka in 1781, wants Shire, a specialist in the treatment of rare conditions, to help it expand globally - especially in the United States - as it faces down the prospect of weaker drug prices in its home market. Its agreed $62 billion takeover of much larger Shire Plc would push combined revenue above $31 billion as the Japanese firm seeks growth in new markets amid patent expirations and drug pricing pressures at home.

According to Takeda, the transaction brings together companies' "complementary positions" in gastroenterology (GI) and neuroscience and positions the new entity to lead in rare diseases and plasma-derived therapies "to complement strength in oncology and focused efforts in vaccines".

Under the terms of the deal, Shire shareholders will receive a total of $66.56 (£49) per Shire share, comprising of $30.33 in cash, and the remainder in 0.839 in new Takeda shares.

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

In late March, Takeda expressed an interest in acquiring Shire, although at that time no official bid had been made. Shire's USA headquarters is in Lexington, MA. Takeda also would get increased exposure to the USA, the world's biggest pharmaceutical market and where Shire generates most of its revenue. Japanese investors have anxious about the hefty debt, with Moody's Investors Service warning last month that Takeda could face a multiple-step credit downgrade due to a "spike in leverage".




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 said the deal will save about $600m in duplicated research and development costs. Shire shares traded up 3.7%.

In 2011 it took over Swiss rival Nycomed for 9.6 billion euros ($13.6 billion at the time).

Hattrell also represented Shire on its $5.2bn acquisition of USA company NPS Pharmaceuticals in 2015 and when it was the subject of an attempted takeover by USA drugmaker AbbVie in 2014. Last year, it purchased Ariad Pharmaceuticals, allowing them to further develop their oncology unit. Merck has agreed to sell its over-the-counter unit to Procter & Gamble, while Sanofi plans to sell its European generic-drug business to buyout firm Advent International.

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