Takeda Pharmaceutical acquires London-listed Shire for $62 bn

Arturo Kim
May 9, 2018

Liberum Capital reiterated its "hold" rating on Shire today, while Berenberg Bank continues to see the rare disease specialist as a "buy". It will be listed on the Tokyo stock exchange. "When it comes to hemophilia, I think there is still a big debate about the level of [sales] erosion".

The deal, struck on the last day Takeda had to make a firm bid, is around 46 percent cash and 54 percent stock, leaving Shire shareholders owning around half of the combination. Shire shareholders will also receive 0.839 new Takeda shares or 1.678 Takeda American Depository Shares, shares of a foreign-based company that can be purchased on a USA stock exchange. Takeda's largest previous purchase was a US$13.7 billion takeover of Nycomed in 2011.

Christophe Weber, Takeda CEO, commented on the acquisition of Shire's "highly complimentary product portfolio and pipeline", saying that it will accelerate Takeda into a strong company, targeting gastroenterology, neuroscience, oncology, rare disease, and plasma-derived therapies. Takeda's research and development also includes vaccines. The deal values Shire, based in Dublin, Ireland, at approximately $62 billion.

Ornskov thanked the Shire team and shareholders to strengthen the company and transform it into the top rare disease biotech company.

For the deal between Takeda and Shire to proceed, 75% of Shire's voting shareholders must support the transaction.

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Takeda and Shire's annual sales total almost $31 billion taken together, which would make the combined company larger than many industry stalwarts like AstraZeneca and Eli Lilly. It would also create the world's eighth-largest drug maker, with combined sales of roughly $30 billion, The Wall Street Journal reported.

The two companies now have more than 50,000 employees between them worldwide and more than 5,000 in MA, making it potentially the biggest pharmaceutical employer in the state. Their drug pipelines are running dry, and their portfolios of patent-protected medicines shrinking.

Japanese firms in particular are facing pressure domestically as the government tries to cut prices of many branded drugs and increase the focus on cheaper generics to curb health spending as the population ages rapidly.

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.

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