The boards of Shire and Takeda are holding a series of investor meetings to convince shareholders of the merits of a £45 billion takeover of the FTSE 100 company after one of the biggest deals in the pharmaceutical industry was struck yesterday.
Osaka-based Takeda will become the world's ninth biggest drugmaker with combined sales of 2.81 trillion yen, the first time that a Japanese pharmaceutical company has joined the top 10 group.
Takeda was advised by Evercore, J.P. Morgan and Nomura, while Shire worked with Citi, Goldman Sachs and Morgan Stanley.
The deal is the latest in a series of takeovers involving British companies.
The combination merges Shire's portfolio of treatments for rare diseases with Takeda's for cancer, gastroenterology and neuroscience. Last year, it purchased Ariad Pharmaceuticals, allowing them to further develop their oncology unit.
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The offer represents a 59.6-per cent premium to Shire's closing price of £30.70 on 27 March, before the Takeda revealed its interest in the company.
The final deal is about 46 percent cash and 54 percent stock, leaving Shire shareholders owning about half of the combined company.
The acquisition will "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", Takeda added.
The companies expect to complete the deal in the first half of 2019. Takeda's existing shareholders are facing a hard time as their stake will be reduced to half. In addition, the Japanese government is increasingly pressuring drug companies to limit or cut prices of blockbuster medicines.
Less than a week later, Shire's board recommended Takeda's takeover proposal. The companies have a number of commercial, research and manufacturing overlaps, particularly in the United States. Its net profit is about three times more than Takeda's. Shire conditionally agreed to Takeda's fifth offer as the deadline approached, but managed to get an extension to today in order to thrash out other terms. "That's where you could have some portfolio assessment and potentially some disposals".