Japan’s Takeda has agreed to buy Dublin-based Shire Pharmaceuticals for £46 billion ($64.42 billion), in what is the sector’s biggest deal since 2000.

Once approved by shareholders it will create the eighth biggest drugs company in the world.

Under the terms of the deal, Shire investors will receive a combination of cash and shares, meaning they will own around 50% of the combined group which will be listed on the Tokyo stock exchange.

The deal (full details here on the Shire website) represents a 64.4% premium on the £29.81 Shire share price in London on 23 March, before rumours of Takeda’s interest.

Why has Takeda bought Shire?

The Takeda board said the deal will:

  • “create a global, values-based, R&D driven biopharmaceutical leader incorporated and headquartered in Japan, with an attractive geographic footprint and the scale to drive future development
  • “strengthen Takeda’s core therapeutic areas, bringing together complementary positions in gastroenterology (GI) and neuroscience, and provide leading positions in rare diseases and plasma-derived therapies
  • “create a highly complementary, robust, modality-diverse pipeline and a strengthened R&D engine focused on breakthrough innovation
  • “and deliver compelling financial benefits for the shareholders of both Takeda and Shire, including significant accretion to underlying earnings per Takeda Share, return on invested capital above Takeda’s cost of capital, and expect it to generate
    substantial cost synergies of at least $1.4 billion.”

What was said?

Chairman of Shire Susan Kilsby said: “Over the last 30 years, Shire has become the global leader in treating rare diseases, delivering innovative products that transform patients’ lives. With this combination, Shire helps create an even stronger biopharmaceutical company, with a robust R&D pipeline and expanded global footprint.

“We are proud of what Shire has become and are grateful to all Shire employees for their contributions. We firmly believe that this combination recognises 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.”

What does Shire Pharmaceuticals do?

Shire says its focus is on developing new treatments for rare diseases. It currently has a pipeline of 40 treatments at various phases of development.

It lists its areas of focus as: neuroscience, genetic diseases, hematology, immunology, internal medicine, oncology and ophthalmics.

The deal will create the world’s eight largest drug company with combined sales of $30 billion.

The Wall Street Journal said the deal helps 237-year-old Takeda “pivot away from its home base to more lucrative markets like the US and Europe, and adds new drugs to its shrinking pool of patent-protected products”.

It said: “Takeda’s unrelenting pursuit of Shire, despite the financial risks and some shareholder opposition, shows how ardently Japan’s legacy companies are chasing growth overseas, weighed down by a shrinking population and, in the case of drug companies, unfavourable government policy.”

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What does Takeda do?

Takeda says: “We innovate with a focus on three therapeutic areas – oncology, gastroenterology (GI), and the central nervous system. We also leverage world-class capabilities to develop vaccines to address critical public health threats using novel development platforms and collaborate with leading partners.”