Takeda reaches takeover deal that values Shire at £46 billion

09 May, 2018, 01:14 | Author: Myra Gill
  • Japan's Takeda announces £46 bn firm offer for Shire

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.

Shire has faced pressures of its own.

The enlarged group will be a Japanese national champion in pharmaceuticals and a leader in gastroenterology, neuroscience, oncology, rare diseases and blood-derived therapies, used for serious conditions such as haemophilia.

As a result of slowing growth at home, Takeda, like many Japanese companies, has been busy expanding business overseas. Shares in the company will be listed on the Tokyo Stock Exchange and the Local Japanese Stock Exchanges, with Takeda also set to apply for its American Depository Shares to be listed on the NYSE.

On March 28, Takeda announced it was considering a bid to buy Shire.

After suffering several rebuffs, Takeda secured a recommendation from the Shire board by raising the amount of cash in its offer to $30.33 (£22.43).


The transaction gives Takeda, a maker of cancer and gastroenterology drugs, greater access to the USA market, while Shire will get greater exposure in Japan and emerging markets. Shire shareholders will also receive 0.839 new Takeda shares or 1.678 Takeda American Depository Shares, shares of a foreign-based company that can be purchased on a USA stock exchange.

Takeda will become the only pharma company with dual listings in Tokyo and NY. The deal is expected to close sometime in the first quarter of 2019, pending review by regulators in a number of countries including the U.S., EU, Japan and China. Even though Shire's headquarters are in Dublin, it earns more than two thirds of its revenue in the USA on drugs like Adderall, which is used for ADHD. 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.

Takeda said that it may reduce the combined workforce by 6 per cent to 7 per cent in the three years, post closing. The two companies reached a merger agreement Tuesday.

Increased debt is not the only risk for Takeda, however.

"I think it is a good deal for Shire shareholders but not everybody may think that". A quarter of Shire's product revenues previous year came from sales of its hemophilia medicines, which face competition from Roche's Hemlibra (emicizumab) now and potentially curative gene therapies in the future.

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