Shire agrees terms of £46bn Takeda takeover offer


The transaction has been approved by both companies' boards and values Shire at around $62 billion.

If the deal is backed by shareholders, it will be the largest overseas takeover by a Japanese company to date.

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

The enlarged group will be a leader in treatments in gastroenterology, neuroscience, oncology, rare diseases and blood-derived therapies. The Irish company sells about 40 kinds of drugs in more than 100 countries, and its sales are also high in the United States - the world's largest pharmaceutical market. 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.

Less than a week later, Shire's board recommended Takeda's takeover proposal. In the offer that finally won over the target, Takeda agreed to pay £49.01, or just over $66, per share - $30.33 in cash and 0.839 Takeda shares for each Shire share. Japanese investors have anxious about the hefty debt, with Moody's Investors Service warning last month that Takeda could face a multiple-step credit downgrade due to a "spike in leverage".

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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 deal will vault Takeda into the top 10 pharma companies worldwide and add tens of billions to its debt load, while touching off a $1.4 billion round of cost cuts that will include deep cuts to the combined workforce. The company was saddled with debt from its $32 billion acquisition of Baxalta in 2016, a widely criticized deal, while generic drug makers have stepped up competition. Shire's shares have soared 31 per cent, giving the company a market capitalisation of about US$50 billion.

The deal is the latest in a series of takeovers involving British companies.

Takeda is the largest pharmaceutical in Japan.

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