£46bn takeover offer recommended to Shire shareholders

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LONDON-Takeda Pharmaceutical Co. agreed to buy London-listed Shire for 46 billion pounds ($62.42 billion or 6.8 trillion yen) on Tuesday after the Japanese company raised the amount of cash in its offer to $30.33 to secure a recommendation. The companies expect the deal to close in the first half of 2019.

Executives of the two companies have reached a broad agreement on the value of the acquisition through past negotiations. However, Takeda announced their intention to reduce the debt quickly.

Takeda said the deal will save about US$600 million in duplicated research and development costs.

The deal would be the largest overseas acquisition by a Japanese company and propel Takeda into the top ranks of global drug firms.

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.

The CEO of Takeda, Christophe Weber cites that jointly with the Shire, a stronger Takeda will emerge.

In a separate statement, it said it would fund the deal with a bridge loan facility of almost $31 billion. Takeda is offering Shire shareholders a mixture of cash and stock. Shire's USA headquarters is in MA.

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

Takeda faced a deadline of Tuesday set by United Kingdom regulators to make a firm offer for Shire, walk away or extend the deadline. With about 30,000 staffers at Takeda and 22,000 at Shire, a 7% cut would cost the jobs of about 3,640 people.

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.

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.

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. Previous year it bought Ariad Pharmaceuticals of Cambridge, Mass. Takeda is valued at about $34 billion.

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