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$64bn Takeda-Shire mega merger inches closer to closing

Published on 25/04/18 at 08:49am

From March onwards, Takeda has been nudging a deal with Shire onwards through repeatedly improved offers, which has seen the most recent offer reach $64 billion.

The offer is the fifth one that Takeda has made and is worth £49.01 per share, made up of £27.26 in Takeda shares and £21.75 in cash.

Shire released a statement on the offer, “The Board has indicated to Takeda that it would be willing to recommend the Revised Proposal to Shire shareholders subject to satisfactory resolution of the other terms of the possible offer, including completion of reciprocal due diligence by Shire on Takeda. Accordingly, the Board will engage in discussions with Takeda in relation to these terms.”

In order to further the discussions, Shire has moved to extend the deadline, which had previously been set as this afternoon, to 8 May to complete discussions and conclude the deal.

Should it go forward, as looks very likely, it would represent one of the largest acquisitions in pharma history and would see Takeda realise its ambition to grow to the scale of rival big pharma companies, such as Pfizer or MSD.

Realising this ambition is not without risk, due to the amount of debt Takeda will have to take on to make the deal possible.  Shares in Takeda are already down 7% on the release of the news that the deal is close.

This year alone has seen shares in Takeda fall from being worth ¥6,666 to their current price of ¥4,510 – regardless, Takeda’s determination to push through the deal, despite the fears, has been obvious, after returning numerous times to Shire to sweeten the offer to this point.

It does leave Shire shareholders in the position of holding half of the share value of the potential newly formed company, which may not be particularly attractive if their worth continues to slip.

For Takeda, acquiring Shire would give it a vastly increased presence in North America and Europe, which it views as essential for its long-term future. The Japanese market for pharmaceuticals is becoming increasingly stagnant and establishing a greater footprint in a high-growth area, such as the US, is deemed attractive.

A Shire deal would also give it large office spaces located in Boston, a hub for the biotech world, where Shire is the second largest employer.

Takeda only responded to the news that Shire had recommended its offer by suggesting that it had noted the statement.

Ben Hargreaves

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