Japan's Takeda agrees $62 billion takeover of Shire

09 May, 2018, 00:35 | Author: Gladys Mathis
  • Takeda closes in on a final $64B deal to buy Shire, starts to consider divestitures — reports

The sale was unrelated to the Takeda acquisition bid and had been ongoing since the beginning of the year.

Last month Shire revealed that it had plans to sell its oncology business to France-based pharmaceutical company Servier for $2.4 billion.

Enhancing Takeda's cash flow profile.

It also intends to put in place an NYSE-listed American Depositary Receipt programme at the point of completion to allow Shire shareholders to continue to hold stock in the combined company.

The $62.2 billion figure does not include Shire's debt.

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.

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

The enlarged group will be a leader in treatments in gastroenterology, neuroscience, oncology, rare diseases and blood-derived therapies, used for serious conditions such as haemophilia. The company will trade in Japan and NY. The Japanese company says it will then start a review of facilities, to see which Shire labs and offices will stay and which will go.

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Drill down into the fine print of the deal, and you'll find that the top execs at Takeda will ax 6% to 7% of the combined workforce.

Takeda said it would maintain its headquarters in Japan and would evaluate consolidating Shire's operations into Takeda's in the Boston area, in Switzerland and in Singapore.

Up to three Shire directors will also join Takeda's board. 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.

The announcement follows a string of lower offers rejected by Shire over the past month.

Under the cash and stock agreement, Osaka, Japan-based Takeda will pay $30.33 in cash for each share of Shire (NASDAQ: SHPG).

Analyst Mike van Dulken, head of research at Accendo Markets, cautioned that there were still "many moving parts", with issues including uncertainty about whether shareholders and regulators would approve the deal. The company could also consider issuing shares, he added. It represents a 60 per cent premium to Shire's closing price on March 27, before Takeda disclosed its interest.

Takeda expects the merged firms will achieve cost-savings of at least US$1.4bn/y. Its net profit is about three times more than Takeda's.

Shire's Chief Executive Officer, Flemming Ornskov is quite positive and enthusiastic about the deal.

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