Shire agrees terms of £46bn Takeda takeover offer

Takeda wiill pay the equivalent of £48.17 per share

Drug giant Takeda on Tuesday said it would buy Irish pharmaceuticals firm Shire in a deal worth $62.5 billion, the biggest foreign takeover ever by a Japanese firm.

The drug maker will be paying almost 49 pounds in cash and stock for each share of the Ireland based company, Shire, as per the closing shire price of Takeda on 23 April (the day before the preliminary deal was announced).

Shire shareholders will own 50% of the enlarged group following the deal, which is expected to complete in the first half of 2019. However, Takeda announced their intention to reduce the debt quickly.

The deal - assuming it wins the backing of shareholders - will be the largest overseas acquisition by a Japanese company and propel Takeda, led by Frenchman Christophe Weber, into the top ranks of global drugmakers.

Analysts say Takeda is eager to acquire Shire in order to boost its global presence and get hold of its portfolio of rare disease medicines, which have high profit margins.

Shire has a strong pipeline of potential drugs in development that complement's Takeda's work, she said.

The agreement ends a takeover battle that had seen Takeda make five offers for UK-listed Shire since late March.

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The successful £46bn bid is the fifth offer put forward by Takeda, and follows a £43bn bid which was rejected by Shire in April.

To help fund the cash portion of the deal, Takeda said it has secured a bridge loan facility of $31bn with JPMorgan Chase, Sumitomo Mitsui Banking and MUFG Bank, among others.

Currently, about a third of Takeda's sales come from the Japanese market, with a similar share represented by US sales. The company was saddled with debt from its $32 billion acquisition of Baxalta in 2016, a widely criticized deal, while generic drug makers have stepped up competition.

The Japanese company's global footprint will be significantly bolstered by the addition of Shire's assets, particularly those in the lucrative U.S. market.

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 for each share. The company expects $1.4bn in overall savings by the third year.

Takeda is the largest pharmaceutical in Japan. Last year, it purchased Ariad Pharmaceuticals, allowing them to further develop their oncology unit.

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