Takeda Pharmaceutical Company and Shire have come to terms for a proposed acquisition of Shire by Takeda for approximately $62 billion. Takeda first disclosed an acquisition proposal for Shire in late March 2018, which was rejected by Shire, and subsequently made several revised proposals. This latest proposal, announced on May 8, 2018, has been approved by both companies’ boards of directors.

Under this latest deal, each Shire shareholder will be entitled to receive $30.33 in cash for each Shire share and either 0.839 new Takeda shares (£27.26 or $36.87) or 1.678 Takeda American Depositary Receipt shares.

The transaction has been approved by both companies’ boards of directors and is expected to close in the first half of calendar year 2019. Upon the closing of the transaction, Takeda shareholders will own approximately 50% of the combined group. The transaction is subject to the approval of Shire and Takeda shareholders and certain customary closing conditions, including regulatory approvals.

Takeda says the acquisition of Shire would provide complementary positions in gastroenterology and neuroscience and provide it with positions in rare diseases and plasma-derived therapies to complement its existing position in oncology. “Shire’s highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda,” said Christophe Weber, President and Chief Executive Officer of Takeda, in a May 8, 2017 company statement. “Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies,” he said.

 “Over the last 30 years, Shire has become the global leader in treating rare diseases, delivering innovative products that transform patients’ lives,” said Susan Kilsby, chairman of Shire, in the May 8 Takeda statement. “With this combination, Shire helps create an even stronger biopharmaceutical company, with a robust R&D pipeline and expanded global footprint.”

Takeda says that the company will continue to be headquartered in Japan, expand its R&D presence in the Boston area, and have major regional locations in Japan, Singapore, Switzerland and the US.

Takeda expects recurring pre-tax cost synergies for the combined group to reach a run-rate of at least $1.4 billion per annum by the end of the third fiscal year following completion of the acquisition. Takeda says the acquisition will accelerate Takeda’s transformation toward Vision 2025, its strategic roadmap for the company’s goals, and that combined cash flows will enable continued investment in R&D.

Takeda has entered into a bridge facility agreement of $30.85 billion with, among others, J.P. Morgan Chase Bank N.A., Sumitomo Mitsui Banking Corporation and MUFG Bank, Ltd., part of the proceeds of which will be used to fund the cash consideration payable to Shire shareholders in connection with the acquisition. Takeda said that it is currently contemplated that, prior to completion, the commitments under the bridge facility agreement will be reduced or refinanced with a combination of long-term debt, hybrid capital and available cash resources.

Source: Takeda Pharmaceutical