Takeda, a Japanese drug maker company to buy Shire at $62 billion

Takeda, a Japanese drug maker company to buy Shire at $62 billion

Takeda, a Japanese drug maker company to buy Shire at $62 billion

Japan's Takeda Pharmaceutical has agreed to buy London-listed Shire, the rare diseases specialist, for £45.3bn. In the offer that finally won over the target, Takeda agreed to pay £49.01, or just over $66, per share - $30.33 in cash and 0.839 Takeda shares for each Shire share.

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

Executives of the two companies have reached a broad agreement on the value of the acquisition through past negotiations.

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

However, Takeda's research and development hub will stay in Boston, she said.

Shire gives Takeda a larger presence in the USA and expertise in rare diseases, an increasingly important area for pharmaceutical companies as patents on established drugs expire.

The acquisition would "strengthen Takeda's core therapeutic areas, bringing together complementary positions in gastroenterology and neuroscience, and provide leading positions in rare diseases and plasma-derived therapies", it added.

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It ends weeks of wrangling, with a string of previous offers having been rejected by the Irish firm.

To help fund the cash portion of the deal, Takeda said it had secured a bridging loan facility of US$31 billion with JPMorgan Chase Bank, Sumitomo Mitsui Banking Corp and MUFG Bank, among others.

Initial reports of a pending M&A deal involving Shire PLC (ADR) (NASDAQ: SHPG) dates back to late March, when The Wall Street Journal reported that Japan-based Takeda Pharmaceuticals was interested in the Ireland-based pharmaceutical giant.

The deal also increases Takeda's exposure to the USA, the world's biggest pharmaceutical market. Shire's US headquarters is in Lexington, MA. The firm expects to general annual pretax cost synergies of $1.4 billion by the end of the third year.

Takeda, which has seen its market value slide to US$34 billion since announcing its interest, is taking over a much bigger rival.

The deal is by far the largest acquisition of a foreign firm by a Japanese company, dwarfing SoftBank Group's 2016 acquisition of Britain's ARM Holdings in a $24.3 billion deal.

Its earlier acquisitions include Ariad Pharmaceuticals in 2017, Nycomed in 2011 and Millennium Pharmaceuticals in 2008 and early this year, it proposed to buy TiGenix, which is expected to close by July this year.

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