One of the largest takeovers in pharmaceuticals has been agreed after the board of Shire recommended that its shareholders accept a £46 billion offer from a Japanese rival. 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. 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. A Shire takeover brings Takeda treatments for rare diseases such as haemophilia - a field that is luring a growing number of drug makers who can charge more for unique life-saving drugs than for routine treatments. The deal, which still needs approval from shareholders, would take effect in the first half of 2019. If the deal closes, Shire shareholders will own around half of the combined business. The deal represents a 59.6 per cent premium to Shire's closing price before Takeda's interest emerged.
The deal gives Takeda (tkpyy), a gastroenterology and cancer specialist, greater access to the USA market, while Shire's portfolio will get greater exposure in Japan and emerging markets, the companies said Tuesday. The transaction has been approved by both companies' boards and values Shire at around $62 billion. Shire, based in Lexington, Massachusetts, gets more than two-thirds of its revenue from North America. Last year Weber bought USA cancer specialist Ariad Pharmaceuticals for $5 billion.
Jobs will go, with the group's combined 52,000 workforce likely to be reduced by 6-7 percent.
Takeda said it would maintain its global headquarters in Japan and evaluate consolidating Shire's operations into Takeda's in the Boston area, Switzerland and Singapore.
Takeda had previously said that expanding its oncology business was a significant reason why it was considering a bid for Shire, along with the desire to expand in along with gastrointestinal medicine and neuroscience. "That's where you could have some portfolio assessment and potentially some disposals", Weber said.
The announcement follows a string of lower offers rejected by Shire over the past month.
Takeda was advised by Evercore, J.P. Morgan and Nomura, while Shire worked with Citi, Goldman Sachs and Morgan Stanley.