Published: Tue, May 08, 2018
Markets | By Otis Pena

Japan's Takeda agrees $62 billion takeover of Shire

Japan's Takeda agrees $62 billion takeover of Shire

Osaka-based Takeda will become the world's ninth largest drugmaker with combined sales of ¥2.81 trillion, the first time for a Japanese pharmaceutical company to crack the top 10.

The company said it has entered into a bridge facility agreement of $30.85 billion with JP Morgan Chase Bank N.A., Sumitomo Mitsui Banking Corp. and MUFJ Bank Ltd.to drum up the necessary funds.

Under the terms of the deal, Shire investors will receive $30.33 in cash for each share they own, plus shares in Takeda, making the total offer worth about £49 a share.

The offer represents a more than 64 percent premium to Shire's March 23rd closing price.

Shire conditionally agreed to Takeda's fifth offer as the deadline approached, but managed to get an extension to today in order to thrash out other terms.

Chief Executive Flemming Ornskov said: "I would like to thank the entire Shire team for all that we have accomplished over the last five years to transform Shire into the leading rare disease biotech company and a tenacious champion for patients in need".

Takeda has agreed that up to three Shire directors will join the company's board once the acquisition is completed.

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Takeda, founded in Osaka in 1781, wants Shire, a specialist in the treatment of rare conditions, to help it expand globally - especially in the United States - as it faces down the prospect of weaker drug prices in its home market.

The firms had been due to conclude the deal in April.

While the deal would boost Takeda's earnings potential, it also comes with risks.

Takeda expects substantial cost synergies of at least $1.4 billion.

Takeda, which has seen its market value slide to US$34 billion since announcing its interest, is taking over a much bigger rival.

Tokyo-listed Takeda's shares, however, climbed nearly four per cent to ¥4,638 (£31.50). Takeda's largest previous purchase was a US$13.7 billion takeover of Nycomed in 2011.

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