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Takeda secures Shire takeover with $62B deal

Takeda secures Shire takeover with $62B deal

Japanese pharmaceutical company Takeda announced Tuesday it would buy Shire for $62.4 billion in cash and stock in a deal that could cause some uncertainty at Takeda's USA headquarters in Deerfield.

Takeda is counting on cash flow from the combined company to allow for a quick pay-down on the acquisition-related debt.

Takeda has however obtained a $31 billion bridge loan to help finance the deal, a fact that had unnerved some investors before the deal's announcement. Having Shire also will increase Takeda's focus on gene-oriented treatments rather than traditional chemical compounds. And prospects looked increasingly dim after news of Takeda's interest sent its shares south and Shire's soaring. The company expects $1.4bn in overall savings by the third year.

The deal increases Takeda's exposure to the USA, the world's biggest pharmaceutical market.

The drug maker will be paying almost 49 pounds in cash and stock for each share of the Ireland based company, Shire, as per the closing shire price of Takeda on 23 April (the day before the preliminary deal was announced).

The deal will vault Takeda into the top 10 pharma companies worldwide and add tens of billions to its debt load, while touching off a $1.4 billion round of cost cuts that will include deep cuts to the combined workforce.

The total deal is consistent with Takeda's fifth proposal and values Dublin-based Shire at 49.01 pounds, or about $66.21, per share.

The final deal is about 46 percent cash and 54 percent stock, leaving Shire shareholders owning about half of the combined company.

The merger of these two companies, with the smaller Takeda capturing the larger prey, gives Weber the global transformation he was asked to deliver.

"We firmly believe that this combination recognizes the strong growth potential of our leading products and innovative pipeline and is in the best interests of our shareholders, our patients and the communities we serve", Shire Chairman Susan Kilsby said in the statement.

Analysts say Takeda is eager to acquire Shire in order to boost its global presence and get hold of its portfolio of rare disease medicines, which have high profit margins.

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

The acquisition of the Irish drugmaker is scheduled to close in the first half of 2019, pending regulatory approvals. Under the terms of the deal, Takeda will buy Shire for about 46 billion pounds, or $62.2 billion (U.S.).

In a separate statement today, Takeda said it will continue to focus on growing its oncology portfolio, which along with its hematology holdings expanded previous year when Takeda acquired Ariad Pharmaceuticals for $5.2 billion.


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