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

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

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

In a separate statement, Takeda said it would fund the deal with a bridge loan facility of almost US$31 billion.

Analysts and business professors recently predicted that the takeover will nearly certainly result in layoffs of several hundred Shire employees over the next couple of years - mostly among administrative employees whose duties could be filled by workers for Osaka-based Takeda.

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

Susan Kilsby, chairwoman of Shire, said the takeover of her company - which is best known as the maker of Adderall, a treatment for ADHD, but has become one of the world's biggest makers of medicines for rare diseases - is in the best interest of shareholders. Takeda's acquisition is part of its strategy to expand internationally and add to its cancer, stomach and brain drug portfolios.

Based on regulations in Britain's stock exchange, where Shire is now listed, the two drugmakers have extended the deadline for announcing whether they will formally propose the acquisition from 5 p.m. on April 25 to 5 p.m. on Tuesday London time.

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Takeda Pharmaceutical has reached an agreement to acquire Shire after raising its offer for the rare disease drug company. It will pay $66.56 per Shire share: $30.33 in cash, with the remainder in the form of 0.839 of a new Takeda share. This is good news for Shire shareholders - since a large proportion of the payment for the deal is in Takeda shares, the value they get depends on Takeda's share price. Japanese investors have anxious about the hefty debt, with Moody's Investors Service warning last month that Takeda could face a multiple-step credit downgrade due to a "spike in leverage".

The companies eventually expect to realize about $1.4 billion in annual cost savings from combining, the majority of which will come from reducing duplicative functions in sales and marketing, Takeda said.

The Japanese company has a market value of just $33 billion, stoking fears about how much debt it will have to take on to fund the acquisition. The Tokyo-listed pharmaceutical company's stock dropped 1.7% to 4,460 yen on Monday, a third straight fall session.

The deal is the latest in a series of takeovers involving British companies. Japan's Nishimura & Asahi and offshore firm Ogier also advised Takeda. A year ago it bought Ariad Pharmaceuticals of Cambridge, Massachusetts.

On March 28, Takeda announced it was considering a bid to buy Shire. Merck has agreed to sell its over-the-counter unit to Procter & Gamble, while Sanofi plans to sell its European generic-drug business to buyout firm Advent International. The combined company will be headquartered in Japan, but Takeda said it will boost its research and development presence in the Boston area, where both companies have sites.

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