BY Richard Summerfield
Following four unsuccessful offers, Takeda Pharmaceuticals is to acquire drug manufacturer Shire for $61.5bn after raising the amount of cash it offered for the company.
The agreement came on the last day Takeda was able to make a firm bid for Shire. The Japanese firm’s previous offers were rebuffed due to price concerns and the fact that Takeda was proposing to pay too much of the acquisition in stock. However, the transaction has now been approved by both companies’ boards of directors, and is expected to close in the first half of 2019.
Under the terms of the agreement, Shire investors will receive $30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda American depositary shares for each share, the companies said, valuing the offer at £48.17 a share.
While the firms had been due to conclude their merger in April, Shire conditionally agreed to Takeda’s fifth offer as the deadline approached, but managed to get an extension to today in order to finalise some other details of the deal. Takeda and Shire have agreed that up to three Shire directors will join the board of the newly-combined business.
“Over the last 30 years, Shire has become the global leader in treating rare diseases, delivering innovative products that transform patients’ lives,” said Shire's chairman, Susan Kilsby, in a statement. “We firmly believe that this combination recognises the strong growth potential of our leading products and innovative pipeline and is in the best interests of our shareholders, our patients and the communities we serve.”
To help fund the cash portion of the deal, Takeda has secured a bridge loan facility of $31bn with JPMorgan Chase Bank NA, Sumitomo Mitsui Banking Corp. and MUFG Bank Ltd., among others.
Takeda expects the deal to save around $600m in research and development costs. Overall, the merger is expected to generate savings of around $1.4bn by the third year.
“Since its inception, Takeda has transformed into an agile, R&D-driven global pharmaceutical company that is well-positioned to deliver innovative and transformative care to patients around the world,” said Christophe Weber, president and chief executive officer of Takeda.
He added: “Shire’s highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda. 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 for our employees and the returns it will deliver for our shareholders.”
The deal, once completed, will be the biggest in the pharmaceuticals sector since 2000.