Takeda secures Shire bid for $62.11bn

Analysts say the deal would be a smart move by Takeda as it looks to diversify but there are also concerns that it could be overextending itself financially

Takeda Pharma offers $62 billion in takeover of Britain's Shire

After several improved bids the board of Irish biopharmaceutical firm Shire agreed to a £46 takeover bid by Japanese drug maker Takeda which will propel it into the position of the world's largest drug maker in the rare diseases business. 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.

The final deal is approximately 46 percent cash and 54 percent stock, leaving Shire shareholders owning around half of the combined group.

On Tuesday, Takeda pledged to quickly reduce the debt and maintain the company's investment grade credit reading.

Takeda said the deal will save about US$600 million in duplicated research and development costs.

Takeda Pharmaceutical Co.'s largest acquisition would catapult the company into the top 10 within the global pharmaceutical industry.

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

"Shire's highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda", Christophe Weber, Takeda's chief executive officer, said in a statement.

Shire has been the subject of a number of proposals from Takeda and said last month that it would be willing to recommend Takeda's £46bn offer subject to the resolution of certain matters.

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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.

Although based in Ireland, Shire has most of its operations in Lexington and Cambridge and more than 3,000 workers in MA.

The move comes after UK-listed Shire, a rare disease specialist, had rejected Takeda's advances four times since late March.

Hattrell also represented Shire on its $5.2bn acquisition of USA company NPS Pharmaceuticals in 2015 and when it was the subject of an attempted takeover by USA drugmaker AbbVie in 2014. Globally, Takeda has 30,000 employees while Shire has 24,000 employees.

The transaction gives Takeda, a maker of cancer and gastroenterology drugs, greater access to the United States market, while Shire will get greater exposure in Japan and emerging markets.

Takeda expects the merged firms will achieve cost-savings of at least US$1.4bn/y.

Takeda is the largest pharmaceutical in Japan.

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