Takeda clinches $62B deal to drugmaker Shire

Takeda clinches $62B deal to drugmaker Shire

Drug giant Takeda on Tuesday said it would buy Irish pharmaceuticals firm Shire in a deal worth $62.5 billion, the biggest foreign takeover ever by a Japanese firm.

The agreement offers US$30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda American depositary receipts. The deal is expected to close in the first half of 2019. Shire rejected the bid, arguing that it undervalued the company.

However, Takeda's research and development hub will stay in Boston, she said.

The deal will catapult Takeda to eighth rank among the top 10 in the global pharmaceutical industry.

"Over the last 30 years, Shire has become the global leader in treating rare diseases, delivering innovative products that transform patients' lives", said Shire chairman Susan Kilsby.

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

Takeda will fund the cash portion of the proposed acquisition, through a $31-billion bridge loan facility secured from JPMorgan Chase Bank, Sumitomo Mitsui Banking Corp and MUFG Bank, among others.

Takeda had previously said that expanding its oncology business was a significant reason why it was considering a bid for Shire, along with the desire to expand in along with gastrointestinal medicine and neuroscience. The company was saddled with debt from its $32 billion acquisition of Baxalta in 2016, a widely criticized deal, while generic drug makers have stepped up competition. Even though Shire's headquarters are in Dublin, it earns more than two thirds of its revenue in the US on drugs like Adderall, which is used for ADHD.

Currently, about a third of Takeda's sales come from the Japanese market, with a similar share represented by USA sales. The firm expects to general annual pretax cost synergies of $1.4 billion by the end of the third year. Its net profit is about three times more than Takeda's.

Shire's shares climbed more than three per cent in early trading.

The deal is by far the largest acquisition of a foreign firm by a Japanese company, dwarfing SoftBank Group's 2016 acquisition of Britain's ARM Holdings in a $24.3 billion deal.

In 2011 it took over Swiss rival Nycomed for 9.6 billion euros ($13.6 billion at the time). Previous year it bought Ariad Pharmaceuticals of Cambridge, Mass. Takeda is valued at about $34 billion.

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