The Japanese company, Takeda Pharmaceutical will buy London-listed Shire Plc for $62.42 billion (46 billion pounds). The buyout will place Takeda Pharma at the ninth rank in the global pharmaceutical industry by revenue. This is one of the biggest international takeovers by any Japanese company
Takeda’s present portfolio includes core treatment for cancer, gastrointestinal and neurological ailments. Acquiring the Shire will add another wing to the Takeda Pharma which is rare-disease treatments, or "orphan drugs”.
The CEO of Takeda, Christophe Weber cites that jointly with the Shire, a stronger Takeda will emerge.
Shire’s Chief Executive Officer, Flemming Ornskov is quite positive and enthusiastic about the deal. Supporting Weber’s mission, he also claims that the deal could help create better drugs for patients too.
Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies.
We are looking forward to the benefits this combination will bring to patients worldwide, the opportunities it will bring to our employees and the returns it will deliver for our shareholders.” - Christophe Weber, CEO Takeda.
Takeda Pharma-Shire Deal Structure
Takeda put consistent effort to take over its bigger rival, Shire and had bid five times since March 27, 2018, improving the offer each time. The initial offer was $59.42 (44 pounds) per share which the Shire outright rejected terming it as undervaluation.
The Shire showed interest when Takeda gradually raised the bid and reached $66.17 (49 pounds) per share. 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.
Post acquisition, Shire shareholders will enjoy ownership of half of the merged organization. Takeda’s existing shareholders are facing a difficult time as their stake will be reduced to half. However, Weber has assured investors that the merger will increase the earning per share. He informed that the merger will retain about $600 million in replica research and development costs.
Ornskov thanked the Shire team and shareholders to strengthen the company and transform it into the top rare disease biotech company. Within a short duration of five years, the Dublin-based company turned into a tenacious champion for patients in need.
He shares, “I am confident that this relentless focus will enable us to continue delivering against our priorities throughout this process.”
“With a truly innovative portfolio and pipeline, I believe that the combination of the two companies is in the best interests of shareholders and offers an opportunity to improve the lives of even more patients globally with rare and highly specialized conditions”, he added.
Stir in Stock Exchange
In view of high buyout price, Takeda Pharma’s shares have continuously slipped in the recent months. The Tokyo-listed pharmaceutical company’s stock dropped 1.7% to 4,460 yen on Monday, a third straight fall session. Contrarily the Shire, which ranks 19th, closed at 38.56 pounds on FTSE 100 listed company on Friday.
To pay the cash fraction of the deal, Takeda told that it had acquired a loan facility of $31 billion with Sumitomo Mitsui Banking Corp., JP Morgan Chase Bank NA, and MUFG Bank Ltd., among others.