Drug giant Takeda Pharmaceutical Co yesterday said it would buy Irish pharmaceuticals firm Shire PLC in a deal worth US$62.23 billion, in the biggest foreign takeover by a Japanese firm.
The deal, which would create one of the world’s top 10 drugs companies, caps a lengthy courtship by Takeda of its larger rival as it seeks to expand overseas.
Shire last month said its board would recommend the ￡46 billion (US$62.23 billion) bid “subject to satisfactory resolution of the other terms of the possible offer”.
Photo: AFP
Takeda yesterday announced that the boards of the two companies “have reached agreement on the terms of a recommended offer pursuant to which” the Japanese firm would buy Shire.
The announcement follows a string of lower offers rejected by Shire over the past month.
Analysts have said the buyout would be a smart move by Takeda as it looks to diversify, and could pay off in the long-term, but it has also raised concerns that the Japanese firm could be overextending itself financially.
In a separate statement, Takeda said it would fund the deal with a bridge loan facility of nearly US$31 billion.
The buyout is the latest in a flurry of merger and acquisition activity in the pharmaceutical industry as traditional players see profits eroded by competition from generic medicines.
Japanese firms in particular are facing pressure domestically as the government tries to cut prices of many branded drugs and increase the focus on cheaper generics to curb health spending as the population ages rapidly.
Takeda, led by Frenchman Christophe Weber, has been actively looking overseas for acquisitions.
In 2011, it took over Swiss rival Nycomed A/S for 9.6 billion euros (US$11.4 billion at the current exchange rate).
Analysts have described Shire as an attractive target for Takeda, with a portfolio of existing treatments in fields where the barriers to entry are high and profits large.
In particular, Shire would give Takeda access to research and development in fields the Japanese firm has long sought, including digestive systems, mental illness and rare diseases.
Takeda said that the buyout would create a global “biopharmaceutical leader” headquartered in Japan “with an attractive geographic footprint and the scale to drive future development.”
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.
Shares in Tekeda closed up 3.99 percent at ￥4,638 just before the announcement, which had been widely expected.
The acquisition is expected to become effective in the first half of next year, it said.
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