Takeda to buy Shire in $62b deal


After weeks of bidding, the Japanese drugmaker agreed to shell out $62 billion on the rare disease specialist, 46% cash, 54% stock-roughly the same terms Takeda disclosed when it announced its fifth bid.

The deal, which would create one of the world's top 10 drugs companies, caps a lengthy courtship by Takeda of its larger rival as it seeks to expand overseas.

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. The deal, which still needs approval from shareholders, would take effect in the first half of 2019.

The pair expects the deal to close in the first half of next year, and when it does, Shire shareholders will own around 50% of the combined company.

Shares in the FTSE 100 listed company rose by 5% n early trading but remain well below the offer price, indicating that Shire shareholders still have reservations about the deal.

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

In a separate statement today, Takeda said it will continue to focus on growing its oncology portfolio, which along with its hematology holdings expanded past year when Takeda acquired Ariad Pharmaceuticals for $5.2 billion.

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Jobs will go, with the group's combined 52,000 workforce likely to be reduced by 6-7 percent.

The two companies now have more than 50,000 employees between them worldwide and more than 5,000 in MA, making it potentially the biggest pharmaceutical employer in the state.

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. Its net profit is about three times more than Takeda's.

Takeda's bestselling drugs include ones that treat metabolic diseases, cancer and cardiovascular problems.

"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. A quarter of Shire's product revenues past year came from sales of its hemophilia medicines, which face competition from Roche's Hemlibra (emicizumab) now and potentially curative gene therapies in the future.

Takeda was advised by Evercore, J.P. Morgan and Nomura, while Shire worked with Citi, Goldman Sachs and Morgan Stanley.