Published: Wed, May 09, 2018
Worldwide | By Stella Potter

Takeda, Shire reach agreement on buyout

Takeda, Shire reach agreement on buyout

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 has been approved by the boards of both companies and is expected to close following shareholder and regulatory approval in the first half of next year. It represents a 60% premium to the share price low from before Takeda confirmed its interest in a buy, he wrote in a Tuesday note to clients. "However, the risk is that if shareholders vote this down then the shares are going to go down a lot", said Polar Capital fund manager Dan Mahony, who owns both Shire and Takeda stock.

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.

Shire last month said its board would recommend the £46 billion (US$62.23 billion) bid "subject to satisfactory resolution of the other terms of the possible offer". Takeda's acquisition is part of its strategy to expand internationally and add to its cancer, stomach and brain drug portfolios. Takeda's main areas of focus moving forward will be neuroscience, oncology, gastroenterology and vaccines.

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's deal marks persistence by the Japanese firm, which tabled five offers by late April - one month after rumours of the deal hit headlines.

In particular, Shire would give Takeda access to research and development in fields the Japanese firm has long sought, including digestive systems, mental illness and rare diseases. The company expects US$1.4 billion in overall savings by the third year.

Tokyo-listed Takeda's shares, however, climbed nearly four per cent to ¥4,638 (£31.50).

The enlarged group will be a Japanese national champion in pharmaceuticals and a leader in gastroenterology, neuroscience, oncology, rare diseases and blood-derived therapies, used for serious conditions such as haemophilia. Takeda was already Asia's largest drug maker. A year ago it bought Ariad Pharmaceuticals of Cambridge, Massachusetts.

It ends weeks of wrangling, with a string of previous offers having been rejected by the Irish firm.

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