 |
| Deal Complete: Clermont Meridian Trading Outlines Takeda and Shire Mega-Merger |
The acquisition of Dublin-based Shire by Japan-based Takeda Pharmaceutical, which was announced last year, is now complete. Clermont Meridian Trading research states that Takeda, 237 years old, is now a top 10 international pharmaceutical business.
Takeda first expressed interest in buying Shire in March 2018, and the rest is history. Takeda had a month from the time it was publicized to make an official offer under UK law. Takeda made an official proposal of $66.22 (US) per share on April 19, valuing the company at $60 billion (US). Shire turned down the offer, claiming it undervalued the company.
During that time, Shire sold its oncology division to Servier of France for $2.4 billion in a separate arrangement. Shire's oncology business was a modest component of its overall portfolio in 2017, bringing in roughly $262 million.
Takeda made five public bids for Shire in total. Shire agreed to be bought for approximately $62.2 billion (US), or $66.22 per share, consisting of $30.33 in cash and 0.839 shares of Takeda stock. The deal also includes Shire's debt, raising the total value of the agreement to $80 billion.
"This acquisition now makes Takeda the largest biotech employer in Massachusetts, after Takeda indicated in September that it would transfer its US headquarters to the state that also has over 3,000 Shire employees," said Andrew Wakefield, Head of Corporate Derivatives at financial services firm Clermont Meridian Trading.
A small but outspoken number of Takeda stockholders tried unsuccessfully to derail the acquisition, but their efforts were unsuccessful. Kazu Takeda, a member of the Takeda family, became the group's spokesperson. Thinking About Takeda's Bright Future was the name given to the group (TTBF). Although some of their criticism was framed as undercutting "Takeda-ism," the company's belief that it creates money by making people happy, others were concerned that the deal's magnitude, particularly the debt Takeda was taking on, wasn't worth the benefits of scaling up.
But the deal went through, and if the first half of 2019 is any indicator, huge deals will be standard. Bristol-Myers Squibb bought Celgene for $74 billion in the first week, while Eli Lilly bought Loxo Oncology for $8 billion in a smaller add-on deal. This could imply a trend or not. Sanofi purchased Bioverativ for $11.6 billion in January, only to follow it up a week later with the purchase of Ablynx, a Belgian company, for $4.8 billion.
“Takeda-Shire is unique in that it will be a sizeable pharmaceutical business that focuses on rare diseases, which it will acquire from Shire. It also expands its footprint in the US pharmaceutical sector,” added Wakefield.
Japan has not become a reliable source of growth due to a declining population and regulatory pressure that has brought medicine prices down practically every year. Although the United States poses a risk in terms of medicine pricing, most pharma behemoths are ready to take it for the revenue stream.
On the other hand, the Takeda-Shire agreement is projected to boost dealmaking this year. Takeda's CEO Christophe Weber stated that the company aims to dispose of $10 billion in assets to help deleverage the $30 billion in debt it is taking on, including Shire's debt. So expect Takeda to sell non-core assets outside of Japan later this year.