Japanese Takeda to acquire Shire for $62bn

Japanese Takeda to acquire Shire for $62bn

Takeda Pharmaceutical (4502.T) agreed to buy London-listed Shire (SHP.L) for 45.3 billion pounds on Tuesday, the biggest yet in a wave of deals sweeping the drugs industry.

The drug maker will be paying almost 49 pounds in cash and stock for each share of the Ireland based company, Shire, as per the closing shire price of Takeda on 23 April (the day before the preliminary deal was announced).

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.

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 has however obtained a $31 billion bridge loan to help finance the deal, a fact that had unnerved some investors before the deal's announcement.

The boards of both companies announced Tuesday morning that they had reached a deal after Takeda raised the amount of cash in the offer it made two weeks ago.

Dr. Andrew Plump, Takeda's chief medical and scientific officer since 2015, said acquiring Shire will raise from three to 10 the number of late-stage clinical drugs that Takeda has in its pipeline. In response, the Irish firm announced on April 25 that it had told Takeda that Shire's board was willing to recommend the offer to its shareholders.

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Takeda faced a deadline of Tuesday set by United Kingdom regulators to make a firm offer for Shire, walk away or extend the deadline.

The acquisition would "strengthen Takeda's core therapeutic areas, bringing together complementary positions in gastroenterology and neuroscience, and provide leading positions in rare diseases and plasma-derived therapies", it added.

Analysts have described Shire as an attractive target for Takeda, with a portfolio of existing treatments in fields where the barriers to entry are high and profits large.

"We can now go after targets and diseases that we couldn't previously", said Plump, who oversees Takeda's research and development operations, which are based in MA.

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. Japan's Nishimura & Asahi and offshore firm Ogier also advised Takeda. Last year, the company expanded its footprint in the United States oncology market with the US$4.7 billion purchase of Ariad Pharmaceuticals.

The combined company will be headquartered in Japan, with an expanded presence in the USA -where Shire and Takeda both maintain significant R&D operations that have grown in recent years-and "major" regional locations in Japan and the US, as well as in Singapore and Switzerland.

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