Japan's Takeda lands £46bn pharma takeover deal

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

One of the largest takeovers in pharmaceuticals has been agreed after the board of Shire recommended that its shareholders accept a £46 billion offer from a Japanese rival.

Under the offer, shareholders would receive the equivalent value of £49.01 per Shire share and also be entitled to receive any dividends announced, declared or paid by Shire in the ordinary course prior to completion of the deal without any consequential reduction in the consideration. The deal is expected to close in the first half of 2019. The companies completed a $32bn merger the following year, with Hattrell leading the firm's team.

Shares in Takeda closed up 3.99 percent at 4,638 yen just before the announcement, which had been widely expected, while in London trade Shire was up 4.77 percent at £40.40.

The deal will vault Takeda into the top 10 pharma companies worldwide and add tens of billions to its debt load, while touching off a $1.4 billion round of cost cuts that will include deep cuts to the combined workforce.

"Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies".

Christophe Weber, Takeda's president and CEO, said, "Shire's highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda".

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.

In a separate statement, Takeda said it would fund the deal with a bridge loan facility of almost US$31 billion. Takeda is offering Shire shareholders a mixture of cash and stock. Shire, based in Lexington, Massachusetts, gets more than two-thirds of its revenue from North America.

The deal increases Takeda's exposure to the U.S., the world's biggest pharmaceutical market.

It's also the largest takeover ever carried out by a Japanese company, according to data provider Dealogic.

Under the cash and stock agreement, Osaka, Japan-based Takeda will pay $30.33 in cash for each share of Shire (NASDAQ: SHPG).

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

Takeda aims to maintain a net debt to EBITDA ratio of 2 times over the medium term, which the company described as a period of between three to five years. Takeda's largest previous purchase was a $13.7bn takeover of Nycomed in 2011. A year ago it bought Ariad Pharmaceuticals of Cambridge, Mass. Takeda is valued at about $34 billion.

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