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Takeda Pharma to Buy Rare Disease Drugmaker Shire for $62 Billion

09 May 2018

Dublin-based Shire agreed to be acquired by Japan-based Takeda Pharmaceutical, with both boards approving the deal. The pharmco's shares have lost more than 12 percent of their value over the past year, as compared with about a 3.6-percent gain in the Footsie.

Takeda's recommended offer is the culmination of a drawn out takeover process which has seen Japan's largest pharma company make multiple bids for London Stock Exchange-listed Shire over recent months.

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

Takeda has agreed that up to three Shire directors will join the company's board once the acquisition is completed. According to MarketBeat, Shire now has a consensus "buy" rating and an average price target of 4,585.75p.

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Takeda said the deal will save about US$600 million in duplicated research and development costs. Shire focuses on rare diseases, and it sells Adderall, which is used for ADHD. Takeda's existing shareholders are facing a hard time as their stake will be reduced to half.

Takeda put consistent effort to take over its bigger rival, Shire and had bid five times since March 27, 2018, improving the offer each time.

The acquisition would be the largest ever for a Japanese company, and would vault Takeda into the top 10 of global pharmaceutical giants.

Shire has offered Takeda a large presence in the USA and an expertise in the rare diseses.

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"Shire's highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda", said Takeda President and CEO Christophe Weber in a statement.

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

Hattrell also represented Shire on its $5.2bn acquisition of USA company NPS Pharmaceuticals in 2015 and when it was the subject of an attempted takeover by USA drugmaker AbbVie in 2014. The company expects $1.4bn in overall savings by the third year. Takeda's largest previous purchase was a US$13.7 billion takeover of Nycomed in 2011.

The acquisition is expected to become effective in the first half of 2019, Takeda said.

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"Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies". Past year it bought Ariad Pharmaceuticals of Cambridge, Mass. Takeda is valued at about $34 billion.

Takeda Pharma to Buy Rare Disease Drugmaker Shire for $62 Billion