Japan's biggest ever deal: Takeda buys Shire for $62 billion

JAPAN-IRELAND-PHARMACEUTICAL-TAKEOVER-SHIRE-TAKEDA

Shire also owned several cancer drugs, but sold the business to French pharma Servier in early April. The sale was unrelated to the Takeda acquisition bid and had been ongoing since the beginning of the year.

Takeda confirmed its pursuit of Shire in late March.

Takeda's board members have approved the details of the acquisition plan that the company will formally propose to Shire, according to sources. That is about $66.22 per share, made up of $30.33 per share in cash and 0.839 shares of Takeda stock. Shareholders in the United Kingdom group will hold about 50 percent in the enlarged drugmaker following completion of the deal, which is slated for the first half of next year.

Takeda's financial advisers included Evercore, JPMorgan Chase and Nomura Holdings, while Shire received financial advice from Citigroup, Morgan Stanley and Goldman Sachs Group. Dealogic says that with debt, the deal is worth $81.5 billion. However, this bid for Ireland-based Shire is significantly larger than its previous acquisitions and if finalised would become the largest takeover by a Japanese company.

"Shire's highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda", Christophe Weber, Takeda's chief executive officer, said in a statement. A Shire takeover brings Takeda treatments for rare diseases such as haemophilia - a field that's luring a growing number of drug makers that can charge more for unique life-saving drugs than for routine treatment. 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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Following completion of the transaction, Takeda shareholders will hold approximately 50% of the combined group.

Drill down into the fine print of the deal, and you'll find that the top execs at Takeda will ax 6% to 7% of the combined workforce. That would mean cuts somewhere in the low to mid 3,000s.

After waging a lengthy campaign to win over the board of Dublin-based Shire, Takeda announced Tuesday that they had an agreement. The initial offer was $59.42 (44 pounds) per share which the Shire outright rejected terming it as undervaluation.

A fair share of industry watchers initially expected that Takeda wouldn't make it to the finish line since snapping up Shire would mean taking on a hefty debt load.

The deal should help Takeda pivot away from its home base to more lucrative markets like the US and Europe, and add new drugs to its shrinking pool of patent-protected products. Shire's will gain more exposure in Japan and emerging markets. The deal represents a 59.6 per cent premium to Shire's closing price before Takeda's interest emerged.

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