Takeda Pharmaceutical to buy larger Irish rival Shire for $62 bn
08 May 2018
In one of the biggest deals in the pharmaceutical industry's history and the biggest international takeover by a Japanese company, Takeda Pharmaceutical today struck a deal to buy its larger Irish rival Shire Plc for $62 billion (£46 billion).
If it materialises, the deal would give Takeda greater access to the US and European healthcare markets. It would also create the world’s eighth-largest drug maker, with combined sales of roughly $30 billion, The Wall Street Journal
The move comes after UK-listed Shire, a rare disease specialist, had rejected Takeda’s advances four times since late March.
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.
The offer represents a 59.6-per cent premium to Shire’s closing price of £30.70 on 27 March, before the Takeda revealed its interest in the company.
Takeda and Shire shareholders will each own about half of the combined company. Up to three Shire directors will join Takeda's board.
Post closing, the New Takeda Shares will be listed on the Tokyo Stock Exchange and the Local Japanese Stock Exchanges. In addition, Takeda will apply for its ADSs (each representing 0.5 Takeda Shares) to be listed on the NYSE.
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 said the transaction will bring in savings of about $600 million in duplicated research and development costs. The company expects $1.4-billion in overall savings by the third year.
Takeda has been conducting due diligence for the past two weeks, but Shire had rejected its offer four times on price disagreement and also because it wanted more in cash and less in stock.
The combined company will have annual revenues of $31 billion, and market cap of $84 billion.
Takeda said that it may reduce the combined workforce by 6 per cent to 7 per cent in the three years, post closing.
The deal will catapult Takeda to eighth rank among the top 10 in the global pharmaceutical industry.
The transaction gives Takeda, a maker of cancer and gastroenterology drugs, greater access to the US market, while Shire will get greater exposure in Japan and emerging markets.
Takeda will become the only pharma company with dual listings in Tokyo and New York. The combined operation will also expand its research and development efforts in the Boston area, the companies said in a statement.
“Shire’s highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda,” said Takeda CEO Christophe Weber. “Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies.”
Founded in 1781 in Osaka, Japan, Takeda is a global, R&D-driven pharmaceutical with around 30,000 employees globally and operating in 70 countries and regions.
Takeda has focused on developing and commercialising innovative therapies that address unmet clinical needs in gastroenterology, oncology and neuroscience plus vaccines.
Its earlier acquisitions include Ariad Pharmaceuticals in 2017, Nycomed in 2011 and Millennium Pharmaceuticals in 2008 and early this year, it proposed to buy TiGenix, which is expected to close by July this year.
Dublin-based Shire focuses on treatments in rare diseases, neuroscience, gastrointestinal and internal medicine and is developing treatments for symptomatic conditions treated by specialist physicians in other targeted therapeutic areas, such as ophthalmics.