Shire Accepts Improved $62B Bid From Takeda

Shire Accepts Improved $62B Bid From Takeda

Takeda Pharmaceutical will pay $62 billion to acquire rare disease biotech Shire, securing on Tuesday a deal that will create one of the world's largest drugmakers by sales and transform the 237-year-old Japanese company. Chief executive Christophe Weber, the first foreigner to lead the 237-year-old Japanese company, is seeking growth in new markets amid patent expirations and drug pricing pressures at home.

Takeda is the largest pharmaceutical in Japan.

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. Nikkei Asian Review says the formal bid now expected will amount to 46 billion pounds in cash and stock - about $64 billion - in line with the latest preliminary numbers offered by Takeda. Having Shire also will increase Takeda's focus on gene-oriented treatments rather than traditional chemical compounds. Last year, the company expanded its footprint in the U.S. oncology market with the US$4.7 billion purchase of Ariad Pharmaceuticals.

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. The companies expect the deal to close in the first half of next year.

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"Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies", he said. However, Takeda announced their intention to reduce the debt quickly. According to the agreed deal, the Irish drugmaker investors will receive $30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda American depositary receipts for each share. If the deal closes, Shire shareholders will own around half of the combined business.

But some of the expected savings will also come from job cuts.

Shire said last month it would be willing to recommend an offer from Takeda after it rejected four previous approaches. The agreement comes more than three years after USA drugmaker AbbVie scrapped its agreed takeover of the London-listed rare disease specialist, following a clampdown on tax inversion deals by the Obama administration. Weber said in a statement, "There is 25 percent (of the portfolio) which is more isolated products. That's where you could have some portfolio assessment and potentially some disposals", Weber said.