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Takeda Agrees To Buy Shire In £46bn Deal

Takeda Agrees To Buy Shire In £46bn Deal

Takeda yesterday announced that the boards of the two companies "have reached agreement on the terms of a recommended offer pursuant to which" the Japanese firm would buy Shire. 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.

The deal, which values Shire at £46bn ($62bn), will see Takeda become one of the 10 largest pharmaceutical companies in the world by sales, as well as putting the company in a leading position in the treatment of rare diseases.

The formal offer comprises $30.33 in cash and either 0.839 new Takeda shares or 1.678 new Takeda American depository shares (ADSs) per Shire share. "Takeda is offering Shire shareholders a mixture of cash and stock".

The price tag has alarmed investors in Takeda: Its shares are down 18% since it first revealed it was considering an approach for Shire in late March.

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Creating a global giant based in Japan with an attractive geographic footprint.

The enlarged company would also probably face a higher tax bill, although Takeda's has not run the numbers.

"We can now go after targets and diseases that we couldn't previously", said Plump, who oversees Takeda's research and development operations, which are based in MA.

Overall, it appears Takeda made five public bids for Shire. By mid-morning London time, it was trading at £40.04, reflecting continued uncertainties about the feasibility of the deal and the large component of Takeda paper contained therein. Shire books a majority of its sales in the USA, where the long term industry outlook is brighter and pricing is more permissive.

Shire, founded in Basingstoke, Hampshire, in 1986, makes ADHD drugs Adderall and Vyvanse and the dry-eye drops Xiidra, as well as treatments for rare diseases.

Under CEO Weber, Takeda has looked outside of its home market for opportunities to expand in its core areas of gastroenterology, cancer and neuroscience. Their drug pipelines are running dry, and their portfolios of patent-protected medicines shrinking.

Japanese firms in particular are facing pressure domestically as the government tries to cut prices of many branded drugs and increase the focus on cheaper generics to curb health spending as the population ages rapidly. Now it must do likewise with Shire's investors - as well as its own. The companies indicated in late April they had reached a preliminary deal valued at £46 billion, or US$64 billion, based on a stronger exchange rate for the pound at the time.

During this period, Shire sold its oncology business to France's Servier for $2.4 billion.

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