Takeda Makes Firm $62.2 Billion Bid for Shire

May 11, 2018: By Jon Swedien

Takeda Pharmaceutical has made a firm $62.2 billion bid to acquire Shire, and the boards of both companies have agreed to the deal, the companies announced May 8.

The bid is roughly 46 percent cash and 54 percent stock.

Shire investors will receive $30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda American depositary shares for each share.

After the deal has been approved, shareholders from both Takeda and Shire would each own about 50 percent of the combined company, the companies said.

The deal is expected to close in the first half of calendar year 2019, although it does require approval from Shire’s shareholders.

In April, the boards agreed to a preliminary $64 billion preliminary bid.

Shire’s market value is roughly $50 billion, about $10 billion more than Takeda’s estimated value.

Takeda’s shares have dropped 18 percent since late March when news of a possible acquisition went public. Some investors have voiced concern that Takeda might overextend itself with only $4.3 billion in cash on hand for the deal.

To pay off debts quickly, Takeda plans to slash thousands of jobs and cut back on duplicated drug research, Reuters reported.

Takeda on May 8 announced it plans to cut a thousand jobs.

Tokyo-based Takeda describes its therapeutic areas as gastroenterology, oncology and neuroscience, plus vaccines.

Shire, founded in 1986, has a workforce of 23 thousand. The company reported 2017 revenues of $15.16 billion, with its dry eye treatment, Xiidra, generating $259 million. Xiidra has topped 1 million prescriptions since its launch in August 2016.

Shire’s overall sales hit nearly $3.77 million (5 percent, 2 percent, cc) in Q1-2018.

Takeda, founded in 1781, has 30 thousand employees. It forecast global revenues for fiscal 2017 of $15.9 billion.

Both companies maintain a large presence in Massachusetts, and the Boston Business Journal said such a takeover would represent a significant consolidation of the state’s biotech sector.

A successful bid for Shire would mark the biggest-ever Japanese acquisition of a Western firm, the New York Times reported. It would create a global drug giant with sales of around $31 billion a year.

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